What is jump-diffusion model
What is jump-diffusion model?
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While a model has both a Wiener process dX term and a Poisson process dq term this is termed as a jump-diffusion model.
Explain the reasons why all apparent arbitrage opportunities cannot be exploited.
What are the main problems with real probabilities to price derivatives?
Why is dispersion trading become unsuccessful?
Explain the example of equilibrium model as Capital Asset Pricing Model.
How is Value of a Contract solved?
Illustrates an example of Poisson Process?
What are uses of Poisson Process in Finance?
Explain different forms of market efficiency.
Why does put-call parity not hold, when option is American?
Explain all mathematical laws under the condition of Central Limit Theorem.
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