<s>
The	O
Korn	B-Application
–	I-Application
Kreer	I-Application
–	I-Application
Lenssen	I-Application
model	I-Application
(	O
KKL	O
model	O
)	O
is	O
a	O
discrete	O
trinomial	B-Application
model	I-Application
proposed	O
in	O
1998	O
by	O
Ralf	O
Korn	O
,	O
Markus	O
Kreer	O
and	O
Mark	O
Lenssen	O
to	O
model	O
illiquid	O
securities	O
and	O
to	O
value	O
financial	O
derivatives	O
on	O
these	O
.	O
</s>
<s>
It	O
generalizes	O
the	O
binomial	O
Cox-Ross-Rubinstein	B-Application
model	I-Application
in	O
a	O
natural	O
way	O
as	O
the	O
stock	O
in	O
a	O
given	O
time	O
interval	O
can	O
either	O
rise	O
one	O
unit	O
up	O
,	O
fall	O
one	O
unit	O
down	O
or	O
remain	O
unchanged	O
.	O
</s>
<s>
In	O
contrast	O
to	O
Black	O
–	O
Scholes	O
or	O
Cox-Ross-Rubinstein	B-Application
model	I-Application
the	O
market	O
consisting	O
of	O
stock	O
and	O
cash	O
is	O
not	O
complete	O
yet	O
.	O
</s>
<s>
The	O
model	O
belongs	O
to	O
the	O
class	O
of	O
trinomial	B-Application
models	I-Application
and	O
the	O
difference	O
to	O
the	O
standard	O
trinomial	B-Application
tree	I-Application
is	O
the	O
following	O
:	O
if	O
denotes	O
the	O
waiting	O
time	O
between	O
two	O
movements	O
of	O
the	O
stock	O
price	O
then	O
in	O
the	O
KKL-model	O
remains	O
finite	O
and	O
exponentially	O
distributed	O
whereas	O
in	O
trinomial	B-Application
trees	I-Application
the	O
time	O
is	O
discrete	O
and	O
the	O
limit	O
is	O
taken	O
by	O
numerical	O
extrapolation	O
afterwards	O
.	O
</s>
