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Derivatives and Risk Management, 1st Edition
book

Derivatives and Risk Management, 1st Edition

by Sundaram Janakiramanan
May 2024
Intermediate to advanced content levelIntermediate to advanced
542 pages
27h 26m
English
Pearson India
Content preview from Derivatives and Risk Management, 1st Edition
388 Derivatives and Risk Management
R E V I E W Q U E S T I O N S
1. What is the major advantage of binomial options pricing mod-
els as compared to the Black–Scholes Model?
2. What are the assumptions about share price movement in
binomial options pricing?
3. Explain the principle of no-arbitrage in binomial options
pricing.
4. How can a call option be replicated by using the underlying
asset and a risk-free asset?
5. ere are two hedge ratios used in binomial options pricing.
Explain these ratios.
6. Binomial options pricing model uses risk-neutral probabili-
ties in valuing options. What is meant by risk-neutral ...
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Publisher Resources

ISBN: 9781299447547Publisher Website