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AP7 - E
AP7 - E

An Introduction to Value At Risk
An Introduction to Value At Risk

Applications of Trees
Applications of Trees

... • Driving in Los Angeles, NY, or Boston for that matter • Playing cards • Invest on stocks • Choose a university ...
T7- Bonds
T7- Bonds

OnPoint—Strategies to benefit from rising rates
OnPoint—Strategies to benefit from rising rates

... Views are as of March 8, 2017 and are subject to change based on market conditions and other factors. This should not be construed as a recommendation for any specific security or sector. Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index composed of securities from the Barclays Gover ...
Tables
Tables

... Theorem (Golynski): Given a bit vector of length n and an “index” (extra data) of size r bits, let t be the number of bits probed to perform rank (or select) then: r=Ω(n (lg t)/t). Proof idea: Argue to reconstructing the entire string with too few rank queries (similarly for select) Corollary (Golyn ...
Introduction to Stripped Yield
Introduction to Stripped Yield

... purchased by the same investors  “Unusual” features are common  Many bonds have principal collateral and rolling interest guarantees ...
Incomplete-Market Prices for Real Estate
Incomplete-Market Prices for Real Estate

... Abstract: This paper reconsiders the predictions of the standard real options models for real estate in the context of incomplete markets. We value vacant land as a European call option on a building that could be built on that land. Since we relax the completeness assumption of the Black-Scholes (1 ...
Search/Insert Properties of BSTs
Search/Insert Properties of BSTs

... Best case (balanced): about lg N nodes between root and each external node/leaf Worst case (unbalanced): about N nodes between root and each external node/leaf With random data: – trees are likely to be well-balanced on average ...
Binary search trees 1
Binary search trees 1

... We draw trees hanging down from a root at the top because it’s easier to draw them that way around, and each node, including the root, can have any number of children. ...
Monte Carlo Derivative valuation:
Monte Carlo Derivative valuation:

... Monte Carlo pricing is computationally expensive! Variance reduction techniques seek to reduce the variance of the sampling distribution of C hence the required number of trials to achieve the desired accuracy. Antithetic sampling can be applied whenever the simulated value (price of the underlying) ...
put
put

... futures contract at a given futures price. Assume that you hold a call option on a bond future @ 98 % of the face value and at the expiration the future price of the bond is 99. By exercising the call, you can take a long position in the futures contract, and the account is immediately marked to mar ...
CSE 326: Data Structures Lecture #7 Branching Out
CSE 326: Data Structures Lecture #7 Branching Out

... • There should be about 1/2 as many nodes of height i+1 as there are of height i ...
PPT Chapter 10 Non- Linear Data Structures
PPT Chapter 10 Non- Linear Data Structures

pptx - David Lillis
pptx - David Lillis

... is n a leaf (external node)? is n==root()? number of nodes tests whether or not the tree is empty returns an Iterator of every element in the tree returns an Iterator of every Node in the tree replaces the element at Node n with e ...
Recursive Linked Lists
Recursive Linked Lists

... However, rather than using while-loops, we use recursion to do all of the work. Recall that with recursion, we are trying to decompose our problem into a smaller version of itself. Most commonly, when we solve a problem with recursion, we end up with two cases: • A base case describing what to do at ...
Trees and Binary Search Trees Dynamic data structures Tree: Tree:
Trees and Binary Search Trees Dynamic data structures Tree: Tree:

... - most operations are linear time (O(N)). ...
Short Duration Income Fund Commentary
Short Duration Income Fund Commentary

... must have a remaining term of at least one month to final maturity and a minimum amount outstanding of $1 billion. You cannot invest directly in an index. The index data referenced herein is the property of Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofAML”) and/or its licensors and has be ...
Bottoms Up method of Factoring Quadratics
Bottoms Up method of Factoring Quadratics

... Step 3: Look for all pairs of factors for the number ac (here “24”) Remember if ac is negative, you will have to look at each set with one number positive and one number negative. Also, if ac is positive, but b is negative, then you know both factors are negative. ...
Trees and Tree Traversals
Trees and Tree Traversals

... First, process the root node. 2. Then, recursively visit all nodes in the left subtree. 3. Finally, recursively visit all nodes in the right subtree. The traversal method works recursively, that is, once the root of the tree is processed, we go to the root of the left subtree, and then to the root o ...
JSE Equity Options Brochure
JSE Equity Options Brochure

... An option is a financial instrument that offers the purchaser the right but not the obligation to buy or sell an asset at a predetermined price at or before a certain date in the future. To obtain the right but not the obligation the purchaser of the option agrees to pay the seller a premium. This c ...
Full text
Full text

... 2 Delta Hedging • Delta hedging an option It involves dynamically trading a position in the underlying energy contract in a way that over each small interval of time between trades, the change in the option price is offset by an equal and opposite change in the value of the position in the underlyi ...
day 6
day 6

... • The potential gain or loss in value of the derivative is huge. – If the underlying asset is volatile, the derivative is even more volatile because it is so leveraged. – For the interest rate swap, a 1% interest rate change can cause thousands of dollars per year change in cash flows. A very small ...
- Wasatch Advisors
- Wasatch Advisors

Additional Exercises
Additional Exercises

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Lattice model (finance)



For other meanings, see lattice model (disambiguation)In finance, a lattice model [1] is a technique applied to the valuation of derivatives, where, because of path dependence in the payoff, 1) a discretized model is required and 2) Monte Carlo methods fail to account for optimal decisions to terminate the derivative by early exercise. For equity options, a typical example would be pricing an American option, where a decision as to option exercise is required at ""all"" times (any time) before and including maturity. A continuous model, on the other hand, such as Black Scholes, would only allow for the valuation of European options, where exercise is on the option's maturity date. For interest rate derivatives lattices are additionally useful in that they address many of the issues encountered with continuous models, such as pull to par.
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