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PBOR Binomial model Q2, Binomial branch Q vs P

Discussion in 'CM2' started by Adithyan, Sep 13, 2019.

  1. Adithyan

    Adithyan Very Active Member

    I dont understand why in col 2 the formula if(rand()<p,payout,0) is used. I am unable to understand what is being done there. Why should rand() be less than 0.4? why are we doing this? How is this an answer for (i)
     
  2. Anna Bishop

    Anna Bishop ActEd Tutor Staff Member

    Hi Adithyan, as this is a PBOR question, I suggest posting it on the PBOR forum.
    Anna
     

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