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Questions tagged [nonlinear]

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Is there such a thing as resonance in economic underliers?

In physics the occurence of resonance is explained and widely understood in its linear form and subject to research in nonlinear resonance. Example for instance are resonant frequencies of objects. ...
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1answer
279 views

Default Probability calculation. How to solve system of 2 non linear equations?

I am trying to repeat calculations from Hull(options futures and other derivatives) chapter "Using Equity Prices to Estimate Default Probabilities". I want to solve system of 2 equations: \begin{...
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0answers
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Calculating the Hedge Ratio

Suppose we have an index whose value is calculated by a weighted geometric mean. Now we want to recreate the index using its underlying components. How would we go about calculating the hedge ratios ...