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Persistent link: https://www.econbiz.de/10012129157
We introduce an asymptotic expansion for forward start options in a multi-factor local-stochastic volatility model. We derive explicit approximation formulas for the so-called forward implied volatility which can be useful to price complex path-dependent options, as cliquets. The expansion...
Persistent link: https://www.econbiz.de/10013028825