Explain the deterministic volatility in an option-pricing
Explain the deterministic volatility in an option-pricing.
Expert
The deterministic volatility surfaces is the concept that volatility is not constant, or though, only a function of time, but an identified function of stock price and time, σ(S, t). Now there the word ‘known’ is a bit misleading. What we really understand are the market prices of vanilla options, a snapshot at one immediate in time. Now we should figure out the correct function σ(S, t) that the theoretical value of our options matches the market prices. It is mathematically an inverse problem; essentially get the parameter, knowing several solutions, volatility and market prices. That model may capture the volatility surface exactly at an instant in time, but this does an extremely poor job of capturing the dynamics, which is, how the data change along with time.
What can a financial institution frequently do for a surplus economic unit that it would encompass difficulty doing for itself if the SEU (surplus economic unit) were to deal directly with a DEU (deficit economic unit)?
Review a current article on strategic planning from a business journal. The article should have been published within the last 3 years. The review is to include full bibliographical information for the article being reviewed and any other referenced material; discuss in scholarly detail a summary of
How will Marking to market put some rationality back in trading?
You need to price a European, non-path-dependent contract upon a basket of equities. Which numerical method should you use?
If the cost benefit of interest rate swaps would probably be arbitraged away in competitive markets, what other explanations present to explain the rapid development of the interest rate swap market?All kinds of debt instruments are not always o
What is Crash Metrics?
the limitation in the process of financial planning
Why are most futures positions closed out through a reversing trade instead of held to delivery?In forward markets, about 90 percent of all contracts that are primarily established result in the short making delivery to the long of the asset und
Society's interests can influence financial managers. Explain.
Normal 0 false false
18,76,764
1952803 Asked
3,689
Active Tutors
1428083
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!