MAFS 5030 Quantitative Modeling of Derivatives Securities

نویسنده

  • Y. K. Kwok
چکیده

(a) Give the definition of an arbitrage opportunity. [1] (b) Show that the existence of Q implies non-existence of arbitrage opportunities. [2] (c) Explain why if there are no arbitrage opportunities in the multi-period model, then there will be no arbitrage opportunities in any underlying single period. Use this result to show that non-existence of arbitrage opportunities implies existence of a martingale measure. [4]

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تاریخ انتشار 2013