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Questions tagged [elasticity]

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2 votes
3 answers
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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 ...
user2521987's user avatar
2 votes
0 answers
891 views

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: $$\...
user2521987's user avatar
1 vote
0 answers
83 views

What is the Price Elasticity of the 10 year Treasury Market? [closed]

At the near culmination (allegedly) of the fastest prolonged Fed Funds Rate hike episode in US history, we find two unusual things: the overall yield curve between 3-month and 10 year Treasuries has ...
Kiers's user avatar
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1 vote
0 answers
376 views

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/...
Bridget Huang's user avatar