(Answered) Use the numerical method of the trinomial tree (or the explicit finite difference method) for computing the value an American put knowing the following information: S = 92; X = 96; RF = 0, 05; Sigma = 0.25; T = 5/12; b = 0.11; n = 900.
Q.13 Use the numerical method of the trinomial tree (or the explicit finite difference method) for computing the value an American put knowing the following information: S = 92; X = 96; RF = 0, 05; Sigma = 0.25; T = 5/12; b = 0.11; n = 900. Q.14 Use Q.13 informations for the calculation […]
(Answered) Define and explain how we can calculate the first and second derivatives (calculus) by numerical methods.
Q.20 Finite difference methods a) Show how we can tie the methods of finite difference to the trinomial trees. b) Define and explain how we can calculate the first and second derivatives (calculus) by numerical methods. c) Explain the method of Crank-Nicholson from the definition of explicit and implicit methods. Q.21 Using a variance reduction […]
