Binomial option pricing for a three period 6% coupon bond.
CFAI does not take into account any coupon payments at any point in the tree except at the start (end of the tree) when you discount the 1.06 (the maturity value). Any ideas why coupons aren’t included? Schweser seems to conflict with this. Thanks in advance作者: simeezee 时间: 2013-4-5 23:15
Because your pricing the option and not the bond itself.作者: stockjaguar 时间: 2013-4-5 23:15
Ack they were just calculating intermediary prices for fun! Thanks for the reply dtrynoski.
