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Examveda

Movement of price or rise or fall of prices of options is classified as

A. option lattice

B. pricing movement

C. price change

D. binomial lattice

Answer: Option D

Solution(By Examveda Team)

Movement of price or rise or fall of prices of options is classified as binomial lattice. The binomial options pricing model provides a generalizable numerical method for the valuation of options. Essentially, the model uses a "discrete-time" model of the varying price over time of the underlying financial instrument, addressing cases where the closed-form Black–Scholes formula is wanting.

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