For example, when determining the probability distribution of a die with ... models that rely on binomial trees. In a binomial tree model, the underlying asset can only be worth exactly one ...

In this example, a sock is taken and not replaced ... He then chooses a second at random. Complete the probability tree. Using the completed probability tree from the previous question, find ...

Example of a Binomial Tree Assume a stock has a price of $100 ... At the end of the year, there is a 50% probability the stock will rise to $125 and 50% probability it will drop to $90.