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Dec
4
comment Why are regressors squared and not ^1.5 or ^2.2 or ^2.5?
@John I don't understand. Do you mean that it's like this because $2$ looks prettier than $x\in[1.5,2.5]$? Surely parsimonious should be defined statistically instead of based on how pretty something looks from a qualitative perspective.
Dec
4
revised Why are regressors squared and not ^1.5 or ^2.2 or ^2.5?
added 46 characters in body
Dec
4
revised Why are regressors squared and not ^1.5 or ^2.2 or ^2.5?
added 6 characters in body
Dec
4
asked Why are regressors squared and not ^1.5 or ^2.2 or ^2.5?
Dec
3
comment How to improve the Black-Scholes framework?
Do you have a source for this definition of returns? (where they actually use to word "returns")
Dec
2
comment How to improve the Black-Scholes framework?
I agree that $\frac{S(T)}{S(t)} = e^{(r-\sigma^2)(T-t)+\sigma(W(T)-W(t))}$ is lognormal, but I thought that the most common meaning of "stock returns" in finance is $ln \frac{S(T)}{S(t)}$.
Dec
2
comment How to improve the Black-Scholes framework?
Prices, not returns, are assumed to be lognormal.
Nov
28
awarded  Teacher
Nov
27
answered Monte carlo methods for vanilla european options and Ito's lemma.
Nov
24
revised Pricing forward contract on a stock
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Nov
24
revised Pricing a Power Contract derivative security
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Nov
24
accepted Pricing forward contract on a stock
Nov
24
revised Pricing forward contract on a stock
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Nov
23
comment Pricing forward contract on a stock
I am increasing in confidence that this is correct because I get the same answer when I work with measure $P^*$ associated with taking the growth optimal portfolio as the numeraire.
Nov
23
revised Pricing forward contract on a stock
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Nov
23
asked Pricing forward contract on a stock
Nov
23
revised Pricing a Power Contract derivative security
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Nov
23
asked Pricing a Power Contract derivative security
Nov
21
revised Measure change in a bond option problem
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Nov
21
revised Measure change in a bond option problem
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