The Rule of Three (R3) states that 3/"n" is an approximate 95% upper limit for the binomial parameter, when there are no events in "n" trials. This rule is based on the one-sided Clopper-Pearson exact limit, but it is shown that none of the other popular frequentist methods lead to it. It...

Actively traded barrier options were introduced on the Australian Stock Exchange in 1998. This market provides a unique laboratory in which to empirically examine their pricing. This is particularly so given that, for a number of these options, otherwise identical standard European options were...