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Springer - General Equilibrium Option Pricing Method Book

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Description

Explore advanced financial modeling with General Equilibrium Option Pricing Method: Theoretical and Empirical Study by Springer. This academic text provides a deep look into asset pricing through two primary lenses: option pricing and the variance risk premium. Instead of relying solely on no-arbitrage methods, this book utilizes a general equilibrium approach to address the volatility smile and smirk puzzles. It explains how investors handle jump risk, noting that higher weights placed on jump risk compared to volatility risk result in a pronounced volatility smirk. This theoretical framework offers a different way to understand market behavior and investor requirements. Designed for those studying econometrics and economics, the book proposes a variance framework based on general equilibrium principles. It serves as a valuable resource for understanding the complexities of jump risk premiums and the mathematical foundations of modern asset pricing models.

Key Features

Addresses the volatility smile and smirk puzzles using a general equilibrium approach instead of standard no-arbitrage methods.

Analyzes how investors weight jump risk against volatility risk to explain market phenomena.

Provides a detailed study of the variance risk premium within a general equilibrium framework.

Explains the generation of a pronounced volatility smirk through jump risk premiums.

Offers both theoretical and empirical studies for a comprehensive understanding of option pricing.

Product Specifications

Colour
White
Format
hardcover
Domain
Amazon UK
Release Date
20 April 2018
Listed Since
26 October 2017

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