• Media type: E-Article
  • Title: Improving convergence of binomial schemes and the Edgeworth expansion
  • Contributor: Bock, Alona [Author]; Korn, Ralf [Author]
  • Published: Basel: MDPI, 2016
  • Language: English
  • DOI: https://doi.org/10.3390/risks4020015
  • Keywords: weak convergence ; option pricing ; binomial model ; Black-Scholes model ; accelerated convergence
  • Origination:
  • Footnote: Diese Datenquelle enthält auch Bestandsnachweise, die nicht zu einem Volltext führen.
  • Description: Binomial trees are very popular in both theory and applications of option pricing. As they often suffer from an irregular convergence behavior, improving this is an important task. We build upon a new version of the Edgeworth expansion for lattice models to construct new and quickly converging binomial schemes with a particular application to barrier options.
  • Access State: Open Access
  • Rights information: Attribution (CC BY)