Authors

• Wael Bahsoun(wab@math.uvic.ca)
  University of Victoria
• Pawel Góra(pgora@vax2.concordia.ca)
  Concordia University
• Silvia Mayoral(smayoral@unav.es)
  University of Navarra
• Manuel Morales(morales@dms.umontreal.ca)
  University of Montreal

Abstract
We introduce a general binomial model for asset prices based on the concept of random maps. The asymptotic stationary distribution for such model is studied using techniques from dynamical systems. In particular, we present a technique to construct a general binomial model with a predetermined stationary distribution. This technique is independent of the chosen distribution making our model potentially useful in financial applications. We brie y explore the suitability of our construction as an implied binomial tree.

Creation Date:2006-09-04

Number:null/06