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, hybrids and credit derivatives), portfolio theory and management, and risk assessment and hedging of individual positions as … Options on Interest Rates -- 18 Elements of Stochastic Calculus -- 19 *The Mathematical Framework of Financial Markets Theory … -- 20 The State Variables Model and the Valuation Partial Differential Equation -- Part 3 Portfolio Theory and Portfolio …
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This paper sets up an experimental asset market in the laboratory to investigate the effects of ambiguity on price formation and trading behavior in financial markets. The obtained trading data is used to analyze the effect of ambiguity on various market outcomes (the price level, volatility,...
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not add new risk to the market or modify existing risk. However, these virtues only apply in the real world in the … time to rethink the standard finance theory approach to derivatives …
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