ASM 9th ed pg. 282
Example 13B asks to calculate an option based on 3 monthly stock prices using a binomial tree. The answer says that there are 8 possibilities over 3 months. I thought 3 monthly stock prices = 4 possibilities, since it only takes 2 months to gather 3 separate prices. I think the wording in the answer and the question are referencing two different time intervals, although independently, each of the phrasings is correct. Anyone have insight to the terminology of "3 monthly prices" vs. "prices over 3 months"?
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