Business, Management and Accounting
6 years ago

Bermudan Call Option Pricing Revolutionizes Stock Market Investment Strategies

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AFEBI Accounting Review
PRICING BERMUDAN-TYPE CALL OPTION THROUGH BINOMIAL TREE METHOD
Izma Fahria

Paper Summary

The researchers used the binomial tree method in Matlab R2010a to calculate the price of a Bermudan call option for John Keels Stock. This type of option allows for early exercise at specified times before the option's expiration. By comparing the Bermudan call option price with European and American options, they found that all three options had the same value.

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