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5

You are essentially dealing with two options: $EU\,{Warrant}(S_t) = BlackScholesCall(S_t)+CompoundCall(S_t)$ The Black-Scholes formula is known, and Compound Option pricing has various approaches in research which you may find.


4

Why does USD based security valuation have to give a thing about what London Banks think? Your question is based on false premises: the USD Libor is not determined by polling London based banks as you seem to believe, but banks on the London money market. The difference is important, as there are—of course—banks which are not based in London and active ...


2

The importance here is that it actually does not matter in what time zone or market the libor rates are set. Key is that it is supposed (!!!) to be a gauge at what rate contributing banks could borrow funds at in the inter-bank market. Like you can go to any African country and borrow or lend US dollar, so can any Japanese, European, or American bank borrow ...


1

There was an error in your expected value, which I have corrected - the probabilities and the binomial coefficient (the "N choose k") should not be raised to the power $c$. With that correction, it is a simple application of the Binomial theorem: \begin{eqnarray} \left(u^cq+d^c(1−q)\right)^N&=&\sum_{j=0}^N {N \choose j}(u^cq)^{j}(d^c(1−q))^{N-j}\\ ...


1

According to this reference there are indeed several types of P/E-Ratios (trailing P/E that is based on previous earnings and forward P/E which is based on projected earnings) Also several books calculate the P/E according to the following formula $P/E-Ratio = \frac{Average Common Stock Price}{Net Income Per Share}$ (Confer source1, source2 and source3) ...



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