Sub-prime credit cards

Credit card companies in the United States offered sub-prime credit cards usually with lower credit limits and charged high fees and interest rates sometimes as high as 30% or more. With slowdown in economic growth in the United States in 2002, the default rates for...

Binomial Model of option pricing

Binomial option pricing model is an options valuation method developed by Cox, et al, in 1979. The binomial option pricing model uses an iterative procedure, allowing for the specification of nodes, or points in time, during the time span between the valuation date...

Pricing of Option

Option pricing is based on some key parameters as discussed before in this chapter. To recapitulate essentially the following factors play a key role in determining the theoretical value of an option: Underlying price of the stock Strike price of the option contract...

Greeks in Option pricing

Option pricing is based on some key parameters as discussed before in this chapter. Essentially the following factors, known as ‘Greeks’ should be grasped to understand the option pricing: Delta Gamma Theta Vega Rho Omega These factors are discussed below...

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