Explain the reasons of Quants to like, close form solution
Explain the reasons of Quants to like, close form solution?
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There are different pressures on a quant while it comes to selecting a model.
• Robust: minute changes in the random process for the underlying don’t issues too much
• Fast: The greeks and prices have to be quick to calculate for several reasons, therefore the trade gets done and you do not lose out to a competitor, and therefore positions can be managed within real time as just one little part of a large portfolio
• Accurate: For a scientific sense the prices ought to be excellent, possibly matching historical data; it is different from robust, obviously
• Easy to calibrate: banks have models which match traded prices of easy contracts.
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Mr. Ross Perot, a former Presidential candidate of the Reform Party, that is a third political party in the United States, had objected strongly to the creation of the North American Trade Agreement (NAFTA), that nonetheless was inaugurated in the year of 1994
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