VI. Miscellaneous Quant Topics

VI. Miscellaneous Quant Topics · 13. November 2023

Discretization translates continuous financial models into numerically solvable steps, crucial for derivative pricing and risk management. It simplifies complex models, enabling simulations like Monte Carlo for exotic options while introducing some approximation error. #QuantitativeFinance #DerivativesPricing #NumericalMethods

VI. Miscellaneous Quant Topics · 03. October 2023

Log returns, derived from natural logarithms of price ratios, offer precision and are additive over time, unlike arithmetic returns. Owing to the Central Limit Theorem, they tend to be normally distributed, aiding in robust financial modeling and risk management. They also prevent negative asset price implications. #Finance #RiskManagement