C?mara A.Chung S.-L.2019-07-222019-07-22200602707314https://scholars.lib.ntu.edu.tw/handle/123456789/414507This article generalizes the seminal Cox-Ross-Rubinstein (1979) binomial option pricing model to all members of the class of transformed-binomial pricing processes. The investigation addresses issues related with asset pricing modeling, hedging strategies, and option pricing. Formulas are derived for (a) replicating or hedging portfolios, (b) risk-neutral transformed-binomial probabilities, (c) limiting transformed-normal distributions, and (d) the value of contingent claims, including limiting analytical option pricing equations. The properties of the transformed-binomial class of asset pricing processes are also studied. The results of the article are illustrated with several examples. ? 2006 Wiley Periodicals, Inc.journal article10.1002/fut.202182-s2.0-33746208837https://www.scopus.com/inward/record.uri?eid=2-s2.0-33746208837&doi=10.1002%2ffut.20218&partnerID=40&md5=7e7889443161cee1c91a2449a082ffe3