--%>
Assignment Help - homework help

Explain the reasons of Quants to like, close form solution

Explain the reasons of Quants to like, close form solution?

E

Expert

Verified

There are different pressures on a quant while it comes to selecting a model.

• Robust: minute changes in the random process for the underlying don’t issues too much

• Fast: The greeks and prices have to be quick to calculate for several reasons, therefore the trade gets done and you do not lose out to a competitor, and therefore positions can be managed within real time as just one little part of a large portfolio

• Accurate: For a scientific sense the prices ought to be excellent, possibly matching historical data; it is different from robust, obviously

• Easy to calibrate: banks have models which match traded prices of easy contracts.

   Related Questions in Financial Management

  • Q : Matching loan and deposit maturities

    Good fellow national bank decided to compete with a savings and loan by offering 30 year fixed rate mortgage loans at 8% annual interest. It plans to obtain the money got the loans by selling one year 6% CD to it's depositors. During first year of operation, good fellows sold it's depositors 1,000,0

    		•
  • Q : Find out expected return on the index

    Find out expected return at last asset when return on the index and slandered devotion is given?

    		•
  • Q : Describe the long position in an

    Describe the long position in an options contract?An option is a contract giving the long the right to buy or sell a given quantity of an asset at a particular price at some time in the future, however not enforcing any obligation on him if the

    		•
  • Q : $-£ currency swap Assume Morgan

    Assume Morgan Guaranty, Ltd. is quoting swap rates as follows: 7.75 - 8.10 percent annually against six-month dollar LIBOR for dollars and 11.25 - 11.65 percent annually against six-month dollar LIBOR for British pound sterling. At what rates will Morgan Gua

    		•
  • Q : Explain Boundary/final condition in

    Explain the term Boundary/final conditions in finite-difference methods.

    		•
  • Q : Enough of complete markets Where can we

    Where can we get incomplete markets?

    		•
  • Q : Describe the three major trend in

    Describe the three major trends which have prevailed in international business at the time the last two decades.The 1980s brought a quick integration of international capital & financial markets. Impetus for globalized financial markets prim

    		•
  • Q : Explain the commonsense criteria that

    Explain the commonsense criteria that of a measure of risk.

    		•
  • Q : Method to choose the members of the

    What are the ways to choose the members of the board of directors of a corporation? Who do these board members owe their primary allegiance?

    		•
  • Q : Illustrates an example of Utility

    Illustrates an example of Utility Function?

    		•