Two-State Option Pricing TOR Richard J. Rendleman Jr, Brit J. bartter Journal of Finance, Volume 34, Issue 5(Dec, 1979), 1093-1110 Your use of the IStoR database indicates your acceptance of ISTOR's Terms and Conditions of Use. A copy of IsTor'sTermsandConditionsofUseisavailableathttp://www.jstororg/about/terms.htmlbycontactingJsTor at jstor-info @umich. edu, or by calling JSTOR at(888)388-3574, (734)998-9101 or(FAX)(734)9989113 No part of a IStOR transmission may be copied, downloaded, stored, further transmitted, transferred, distributed, altered, or otherwise used, in any form or by any means, except: (1)one stored electronic and one paper copy of any article solely for your personal, non-commercial use, or(2)with prior written permission of jSTOR and the publisher of the article or other text Each copy of any part of a IStoR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission Journal of Finance is published by American Finance Association. Please contact the publisher for further permissions regarding the use of this work. Publisher contact information may be obtained at http://www.jstor.org/journals/afina.html aal of finance 9 American Finance Association ISTOR and the IStoR logo are trademarks of JSTOR, and are Registered in the U.S. Patent and Trademark Office For more information on STOR contact jstor- info@umich. edu @2000 JSTOR Sat dec160951:04200