Binomial coefficients calculate the number of possible combinations when selecting outcomes from a set. They are used in the binomial theorem to expand a binomial and can be calculated using factorials. Pascal’s triangle is made up of binomial coefficients and has unique mathematical properties. Binomial coefficients define the number of possible combinations when selecting a […]
The binomial distribution calculates the probability of x successes out of n trials with probability of success p. Mean is np and variance is np(1-p). It belongs to a family of distributions including the Bernoulli and negative binomial. The binomial distribution can be approximated by a normal or Poisson distribution for large n. A binomial […]
Binomial nomenclature identifies organisms by genus and species, fitting into the larger picture of taxonomy. Scientific names are given in uppercase genus and italics. Developed by Carolus Linnaeus, taxonomy is overseen by various organizations and is subject to change. Binomial nomenclature is the system used to identify all organisms on Earth, from elephants to algae. […]
A binomial tree is a graphical representation of two possible outcomes at each stage, used to track asset price movements and value call and put options. The binomial option pricing model uses a formula based on the Black-Scholes model, but both have limitations and assumptions. A graphical representation of a scenario with two possible outcomes […]
The binomial option pricing model is a method of determining the value of an option contract, useful for US options, which can be exercised any time before the expiration date. It is based on a branching structure that allows investors to make specific predictions about future prices, and can be adjusted to reflect anticipated changes […]
A binomial tree is a graphical representation of a scenario with two possible outcomes at each stage, commonly used in finance to track asset price movements and evaluate call and put options. The binomial option pricing model uses a formula based on the Black-Scholes model to determine the value of an option, but the assumptions […]
