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This paper considers various options replication methods. Firstly, a specific type of barrier option, an up …-and-out call, is considered. Other barrier options are briefly also described, and various types of barriers are considered …
Persistent link: https://www.econbiz.de/10008549672
In general, there exist many ways to detect the fair value of financial derivatives. However, each of them is suitable for different purposes. For example, when the payoff function is not very simple or the underlying process is too complex, the approach of Monte Carlo simulation can be useful....
Persistent link: https://www.econbiz.de/10008754960
Three approaches toward the determination of fixed swap rates are presented in this article: a swap as a portfolio of bonds with a fixed and floating coupon, a swap as a portfolio of forwards, and a swap as the difference between the cap and the floor (zero-collar). Later in the paper, credit...
Persistent link: https://www.econbiz.de/10008549883
Hedging strategies represent basic instrument used toward eliminating financial risk. Increasing volatility of financial markets and their globalization also lead to higher financial risks. These aspects are especially important for transitional and small open economies. The basic goal of the...
Persistent link: https://www.econbiz.de/10008495620
The Czech tax system is undergoing radical transformation. Among the many forthcoming changes, several features can be identified, which alter the structure of tax asymmetries. This paper uses an option-based model of direct taxation to examine a controversial new thin-capitalization rule,...
Persistent link: https://www.econbiz.de/10008754958
materialized through different possibilities, described as real options. It is possible to evaluate the price of real option by … end of this article. Real options is at modern approach to capital budgeting. …
Persistent link: https://www.econbiz.de/10005036686
Persistent link: https://www.econbiz.de/10010441306