Difference between complete market and binomial models
What are the difference between complete market and binomial model?
Expert
In the complete market you can replicate derivatives along with the simpler instruments. Although you can also turn it on its head in order that you can hedge the derivative along with the underlying instruments to make a risk-free instrument. Within the binomial model you can replicate an option by stock and cash, or you can hedge the option along with the stock to make cash. Similar idea, similar equations, just move terms to be on various sides of the ‘equals’ sign.
Unfocused Books is a discount retail bookshop that has three departments: fiction, non-fiction and children’s books. Sales and cost of sales for each department are shown below. In addition, each department has its own fixed costs for staffing and takes a one-third share of rental and management cos
Explain the tool of Green’s functions in Quantitative Finance.
What is the Capital Asset Pricing Model?
Normal 0 false false
How do flotation costs affect the cost of raising the capital when a company issues new securities?
Explain the Discrete/Continuous modelling approach in Quantitative Finance.
Explain probabilities and statistics for quantifying risk in finance.
How must you hedge discretely?
What is Vega Hedging?
How is risk and return related to the market as a whole? Give an example.
18,76,764
1959625 Asked
3,689
Active Tutors
1420674
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!