The binomial model always gives the same option price as the Black-Scholes-Merton model.

Question

Quizplus · Accepted Answer

The binomial model and Black-Scholes-Merton model are two different mathematical models used to price options. While they can both provide similar results, they are not guaranteed to always give the same option price. Factors such as the underlying asset's volatility and interest rates can cause differences in the calculated option price.

The Binomial Model Always Gives the Same Option Price as the Black-Scholes-Merton