The fundamental formula for binomial pricing is identical between stock option and bond option. However, how to treat the dividend and coupon payments are different.Explain the difference between the two.

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  • Kari

    April 18, 2016

    As I understood your question you need a good book on pricing derivatives. Try this:Hull , John – Options, Futures and Other Derivative Securities (5nd Ed.)Since direct links are not welcome here, you should open -> choose e-books directory -> search for ‘derivatives’ -> get the direct link and spent couple of minutes reading the demanded chapters.


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