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20.13 Path Dependence. The traditional view Backwards induction works well for American options. It cannot be used for path-dependent options Monte carlo simulation works well for path-dependent options; it cannot be used for American options Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 20.13 Path Dependence: The Traditional View • Backwards induction works well for American options. It cannot be used for path-dependent options • Monte Carlo simulation works well for path-dependent options; it cannot be used for American options
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