Explain the Jump-diffusion models in an option-pricing
Explain the Jump-diffusion models in an option-pricing.
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Jump-diffusion models permit the stock (and still the volatility) to be discontinuous. That model contains various parameters that calibration can be instantaneously further accurate (when not necessarily stable through time).
How is Value of a Contract solved?
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Explain the term Linear or non-linear in finite-difference methods.
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When we can use Monte Carlo numerical method?
Illustrates an example of Monte Carlo Simulation?
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