Tree methods in finance
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چکیده
Tree methods are amongst the most popular numerical methods to price financial derivatives. They are mathematically speaking easy to understand and they do not require severe implmentation skills to obtain algorithms to price financial derivatives. Tree methods basically consist in approximating the diffusion process modeling the underlying asset price by a discrete random walk. In fact, the price of a European option of maturity T can always be written as an expectation either of the form
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