# Binomial model

**英文** **Binomial model**

**中文** （征集中）

**英文释义**

（1）Any model that incorporates a binomial tree, also called a binomial lattice. （2） Describes the evolution of a random variable over a series of time steps, assigning given probabilities to a rise or fall in the variable. After the initial rise or fall, the next two branches will each have two possible outcomes and so the process will continue, building a ‘tree’ over time. The process is usually specified such that an upward movement followed by a downward movement results in the same price, so that the branches recombine. Binomial trees are of interest because they can be used to deal with American-style features: the early exercise condition can be tested at each point in the tree

**中文释义**

（征集中）

**词条来源** 网络