Is the Black–Scholes formula correct
Is the Black–Scholes formula correct?
Expert
The Black–Scholes formula is not correct, if volatility is not constant. Again, here is the small caveat which the Black–Scholes formula can work when volatility is a known deterministic time function.
In integrated world financial market, a financial crisis in a country can be quickly transmitted to other countries, causing global crisis. What sort of measures would you suggest to stop the recurrence of Asia-type crisis? Q : Advantages of investing by Describe the advantages of investing by international mutual funds? The advantages of investing by international mutual funds comprise: (1) save transaction/information costs,
Describe the advantages of investing by international mutual funds? The advantages of investing by international mutual funds comprise: (1) save transaction/information costs,
What are the important observations about hedging error?
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
Hebner Housing Corporation consist of forecast the given numbers for the upcoming year as follows: • Net income = 180,000. • Sales = $1,000,000. &b
What are the interest areas for financial managers when they go through pro forma financial statements?
Illustrates an example relates with risk that defined in mathematical terms.
Example of Girsanov’s Theorem.
What volatility should be used for each option series hence the theoretical Black–Scholes price and the market price are similar?
Explain drawbacks of Brownian motion.
18,76,764
1957739 Asked
3,689
Active Tutors
1440238
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!