Cheung, Joseph K; Chung, Richard - In: Review of Quantitative Finance and Accounting 7 (1996) 2, pp. 163-76
This article presents a graphical approach to measuring financial instruments. It observes that the payoff contingencies of a large number of single-payoff financial instruments can be reduced to a piecewise-linear cash flow, which can be replicated with a handful of basic building blocks. Four...