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I also thought there were questions based on the 2023 syllabus. Lost a lot of time trying to attempt these.
Great! Thank you!
Hi John, Thank you for that explanation! Is it correct to say that with the washing machine - I am limiting my loss to P instead of X? And with...
Hello, For question 1 the max price paid is calculated as E(U(w-P+X)) = U(w) In the notes the max “premium” paid for insurance is E(U(w-X)) =...
Hi John, Thank you. It definitely makes sense now!
Thank you! It definitely helps
Hello, For the black scholes chapter, there is a lot question where the payoff is S1 - 35 if 35<=S1<=45 10. if 45<=S1<=55 65 - S1 if...
Thank you!
Hello, For part (ii) in the question, why do we take dividends into account? Do the dividends affect the share price? I would think that for a...
Hello, For Q9 in the Sept2023 exam: Why do they add 0.1*exp(-0.02*10) at the end when calculating the price? Also, how does this question differ...
Hello, In the practice question 8 and 9 (2023 version of notes), both questions have the same formula for the GBM. S_t = exp(mu*t + sigma*Bt)...
