Edgeworth binomial tree

Edgeworth binomial tree is a way to show how prices of different things (like stocks or houses) can go up and down. To create an Edgeworth binomial tree, you draw a triangle showing different prices that something could be, with the bottom being the most it could cost, and the top being the least it could cost. To the left of each price on the triangle, you draw an arrow that shows that the price can go lower, and to the right of each price, you draw an arrow that shows the price can go higher. This creates a picture that looks like a tree with its branches going up and down. It helps you understand how the price of something can go both higher and lower.