January 2014
Intermediate to advanced
752 pages
29h 9m
English
book
Modern Portfolio Theory and Investment Analysis, 9th Edition
by Edwin J. Elton, Martin J. Gruber, Stephen J. Brown, William N. Goetzmann
Content preview from Modern Portfolio Theory and Investment Analysis, 9th EditionBecome an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
23
Option Pricing Theory
The markets for options are among the fastest-growing markets for financial assets in the United States. While option trading is not new, it experienced a gigantic growth with the creation of the Chicago Board of Options Exchange in 1973. The listing of options meant more orderly and thicker markets for these securities.
The growth in option trading has been accompanied by a tremendous interest among academics and practitioners in the valuing of option contracts. In this chapter we discuss alternative types of options, examine the effect of certain characteristics on the value of options, and present explicit models for valuing options.
TYPES OF OPTIONS
An option is a contract entitling the holder to buy or sell a designated security at or within a certain period of time at a particular price. There are a large number of types of option contracts, but they all have one element in common: the value of an option is directly dependent on the value of some underlying security. Options represent a claim against the underlying security and thus are often called contingent claim contracts. The two least complex options are called puts and calls. These are the most widely traded options. In addition, most other options either can be valued as combinations of puts and calls or can be valued by the methodology developed to value puts and calls. Consequently, we begin this section with a discussion of puts and calls, and then we discuss other types of options and ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.