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Shvoong Home>Science>Convergence Monte Carlo Simulation to the Black-Scholes Formula in Pricing Warrants Summary

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Convergence Monte Carlo Simulation to the Black-Scholes Formula in Pricing Warrants

Article Abstract by: fadzlina     

Original Author: Benny Yong
Warrants are call options issued by firms, which gives the holder the right to buy the underlying asset from the firm by
a certain date for a certain price.  Many methods for pricing warrants.  In this paper, the value of the warrant will be determined by using Black-Scholes formula and Monte Carlo simulation.  Monte Carlo methods will be used here are standard Monte Carlo and antithetic variable.  Warrant value from Black-Scholes formula and Monte Carlo simulation will be compared each other.  Convergence warrant value from Monte Carlo simulation to the Black-Scholes formula will be presented here.
Published: April 17, 2007
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