1. Motivation
2. Black Scholes Option Pricing Model
Options
5 factors
Assumptions
Caculation of Black-Scholes Model
Understanding B-S formula
Understanding B-S formula
Extracting sample data
Materialization of B-S model
Deriving B-S option price
Multiple Regression Model – Con’td
Comparison : Real Call option price & Regression & Black-Scholes Model
3) Put Option Valuation
A Pall Option confers the right on its holder, without the obligation, to sell the underlying asset at a certain date for a certain price. Only a little extra work is needed to value put options. Basically , we just pretend that a put option is a call option and use the Black-Scholes formula to value it. We then use the put-call parity condition to solve for the put valu
I. Introduction
1. The significance of the Ricardian Model
The modern economic trade theory was originated from the advocator of ‘absolute advantage’, Adam Smith. According to the theory of ‘absolute advantage’, each country specializes in the product of its absolute advantage in productivity. The theory of ‘absolute advantage’ was accepted as intuitively correct during that time
Research Purpose
Nowadays, there are many different models of cars and their prices range.
We want to know what the factors are which affect the selling price of the car and how much each variable explains the selling price.
Research Process
To determine if there is a correlation between various factors and the selling price of the car, the multiple linear regression model was used
multiple linear regression model was used. First, 10 explanatory variables that are likely to affect selling price of the car were potentially set and the data were collected. In this course, we referred to website (http://www.enuri.com/car) that sells new cars. Next, the standard regression assumptions were checked. Finally, fitness of model was examined by deciding whether the price of the car