Recursive Option Pricing Failure - Quant Trader Interview Question
Difficulty: Easy
Category: Code Analysis
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Topics: recursion, stack-overflow, option-pricing, binomial-tree
Problem Description
You are developing an option pricing model using a recursive function. The function calculates the option price at a given node in a binomial tree by averaging the discounted option prices of the two possible successor nodes. You've noticed that for very deep trees (many time steps), your program crashes. What is the most likely cause of this issue?
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