Note that at instant 2, the middle outcome occurs on two possible paths, whilethe two extreme outcomes occur only on one path each; u . d . S0 can come aboutif there is one u followed by one d, or if there is one d followed by one u. This isalready a statistical distribution that shares with a bell-shaped (normal) distributionthe feature that middle outcomes are more likely than extreme outcomes. (With many ➤ Bell shaped distributionsand binomial trees, Section26.8, p. 1020 more binomial tree levels, you indeed end up with a continuous distribution thatlooks a lot like a bell-shaped curve.)
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