Bonds With Embedded Options：
Callable bond', issuer has the right to buy back the bond in the future at a
set price; as yields fall, bond is likely to be called; prices will rise at a
decreasing rate—negative convexity.》》》戳：免费领取FRM各科视频讲义+历年真题+21年原版书（PDF版）
Putable bond', bondholder has the right to sell bond back to the issuer at a
Binomial Option Pricing Model：
A one-step binomial model is best described within a two-state world where
the price of a stock will either go up once or down once, and the change will
occur one step ahead at the end of the holding period.
In the two-period binomial model and multiperiod models, the tree is expanded
to provide for a greater number of potential outcomes.
Step 1: Calculate option payoffs at the end of all states.
Delta', estimates the change in value for an option for a one-unit change in
• Call delta between 0 and +1; increases as stock price increases.
• Call delta close to 0 for far out-of-the-money calls; close to 1 for deep
• Put delta between —1 and 0; increases from —1 to 0 as stock price
• Put delta close to 0 for far out-of-the-money puts; close to -1 for deep
• The delta of a forward contract is equal to 1.