  We provide a lean, non-technical exposition on the pricing of path-dependent
and European-style derivatives in the Cox-Ross-Rubinstein (CRR) pricing model.
The main tool used in the paper for cleaning up the reasoning is applying
static hedging arguments.
  This can be accomplished by taking various routes through some auxiliary
considerations, namely Arrow-Debreu securities, digital options or backward
random processes. In the last case the CRR model is extended to an infinite
state space which leads to an interesting new phenomenon not present in the
classical CRR model.
  At the end we discuss the paradox involving the drift parameter $\mu$ in the
BSM model pricing. We provide sensitivity analysis and the speed of converge
for the asymptotically vanishing drift.
