--%>

Explain accurately value bond options

If the model could not even find bond prices right, how could this hope to accurately value bond options?

E

Expert

Verified

Thomas Ho and Sang-Bin Lee found a way around it, introducing the concept of yield-curve fitting or calibration, 1986.

   Related Questions in Corporate Finance

  • Q : Explain Value Chain Value Chain : The

    Value Chain: The value chain is a theory from business management that was first described and popularized Michel Porter in his 1985 best seller, Competitive Advantage: Creating and Sustaining Superior Performance.

  • Q : Road King Trucks Project I want to know

    I want to know how much do you charge for doing the project?

  • Q : Problem on stock market John Wong is a

    John Wong is a fresh graduate and has a limited amount of funds for investments. He expects that the Hong Kong stock market will fall soon but he is not familiar with derivatives. In order to gain more money to buy a car, he explores engaging in Hang Seng Index (HSI)

  • Q : Valuation & Merger analysis Problem

    Problem 21-1 Valuation Harrison Corporation is interested in acquiring Van Buren Corporation. Assume t

  • Q : Investors are irrational or naive

    Explain how companies with substandard financial history can draw the attention of investors. Are investors irrational or naive?

  • Q : Define stock variable Stock variable :

    Stock variable: It is a variable whose value is measured or evaluated at a point of time.

  • Q : Define Economy Impacts Economy Impacts

    Economy Impacts: An upcoming economy is indicated by rise in stock market, as stock market is primary indicator of a economic strength of a country. Progressing economy results in market boom. Yield of companies’ increases on improving economy,

  • Q : Explain the Monte Carlo evaluation of

    Explain the Monte Carlo evaluation of integrals.

  • Q : Working Capital - Current Assets and

    I do not know the meaning of Working Capital Requirements. I think this should be same to Working Capital (Current Assets – Current Liabilities). There am I right?

  • Q : Which currency is utilized in an

    Which currency has to be utilized in an international acquisition in order to compute the flows?