Enough of complete markets
Where can we get incomplete markets?
Expert
The answer of this question is ‘everywhere.’ Practically, all markets are incomplete due to real-world effects which violate the assumptions of the easy models.
Explain Poisson process in Brownian motion.
State the term Option Adjusted Spread? Answer: The OAS stands for Option Adjusted Spread is the constant spread added to a forward or a yield curve to match the mark
Define market for foreign exchange.Broadly described, the foreign exchange (FX) market encompasses the conversion of purchasing power from one currency to another, bank deposits of foreign currency, the extension of credit denominated in a forei
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How is estimate of volatility or the implied volatility used?
Who introduced the concept of company’s debt associated to the strike price and the maturity of the debt?
What volatility should be used for each option series hence the theoretical Black–Scholes price and the market price are similar?
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