Interview Question on Greeks (Option Pricing) – 50 Q&A 1. What are Greek options in the context of financial derivatives? The variables that are used to assess risk in the options market are commonly referred to as “the Greeks.” A Greek symbol is used to designate each of these risks. The most common Greeks used …
Q1. What is Stochastic Process? A stochastic process, also known as a random process, is a collection of random variables that are indexed by some mathematical set. Each probability and random process are uniquely associated with an element in the set. The index set is the set used to index the random variables. The term random …
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 …
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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