Conditions for deterministic stock price path equity option
Explain the conditions for assuming a deterministic stock price path for an equity option.
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We have to impose several conditions upon the function r(t).• Forward rates must be positive, or here will be arbitrage opportunities.• Forward rates must be continuous (however this is commonsense rather than due to any financial argument).• Perhaps the curve must also be smooth.
Assume that you inherited some money. A friend of yours is working as an unpaid intern at a local brokerage firm, and her boss is selling securities that call for 4 payments of $50 (1 payment at the end of each of the next 4 years) plus an extra payment of $1,000 at the end of Year 4. Your friend sa
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Janice Colangelo heads the Training Centre of the large HR Consulting firm EMT Consulting. The firm has three major departments: Recruitment, Training and Career Services. The Training Centre provides management training for employees of various businesses. Recruitment provides recruitment service
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