QFE University

August 2023

Options & Derivatives (Part A: 50 Q&A)

Options and Derivatives 1.    What is an exchange? An exchange, refers to a marketplace or platform where various financial instruments, such as stocks, bonds, commodities, derivatives, and currencies, are traded. It provides a centralized venue where buyers and sellers can come together to execute transactions. Exchanges play a vital role in facilitating the smooth functioning of …

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Interview Question on Geometric Brownian Motion (GBM)

1.    What is Geometric Brownian Motion (GBM)? Geometric Brownian Motion (GBM) is a mathematical model commonly used to describe the stochastic (random) behavior of certain continuous-time processes, particularly in the field of finance. It’s an essential concept in option pricing, risk management, and other areas ofquantitative finance. GBM is widely used to model the price movement of assets, such …

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