Explain new methodology of standard market practice
Explain new methodology of standard market practice.
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The newly methodology, that quickly became standard market practice, was to find the volatility as a function of underlying and time which when put into the Black–Scholes equation and solved, generally numerically, gave resulting option prices that matched market prices. It is identified as an inverse problem: use the ‘answer’ to get the coefficients into the governing equation.
Stock exchanges: A stock exchange provides services useful for trading, issue and redemption of shares and other securities for traders and brokers. They will also provide facility for payment of income and dividends for listed securities. Securities
I suppose that a valuation consciously realized in my name tells me how much I have to offer for the company, am I right?
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