Questions tagged [elasticity]
The elasticity tag has no usage guidance.
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What's the difference between demand elasticity and demand volatility? [closed]
What's the difference between demand elasticity and demand volatility?
Demand elasticity: https://www.investopedia.com/terms/d/demand-elasticity.asp
Demand volatility: https://www.sdcexec.com/home/...
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A more mathematically rigorous explanation for why in the B-S model, the expected return on a call goes down as the stock price goes up
A problem asks whether the following statement is true assuming the Black-Scholes Framework:
The expected return on a call option goes up as the stock price goes up.
The solution is:
The statement ...
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How do we know that the instantaneous rate of return on this option, $\gamma$ is negative?
I am self-studying models for financial economics and encountered the following problem:
I don't see how the author can conclude that $\gamma = -0.62$. Let's rearrange the second to last equation: $$\...
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