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Risk-neutral pricing dictates that the discounted derivative price is a martingale in a measure equivalent to the economic measure. The residual ambiguity for incomplete markets is here resolved by minimising the entropy of the price…

数理金融 · 定量金融 2020-07-01 Paul McCloud

The paper develops general, discrete, non-probabilistic market models and minmax price bounds leading to price intervals for European options. The approach provides the trajectory based analogue of martingale-like properties as well as a…

数理金融 · 定量金融 2015-11-06 Sebastian E. Ferrando , Alfredo L. Gonzalez , Ivan L. Degano , Massoome Rahsepar

We derive integral tests for the existence and absence of arbitrage in a financial market with one risky asset which is either modeled as stochastic exponential of an Ito process or a positive diffusion with Markov switching. In particular,…

数理金融 · 定量金融 2020-02-13 David Criens

In this paper we consider two ways to generalize the mathematical expectation of a random variable, the Choquet expectation and Peng's g-expectation. An open question has been, after making suitable restrictions to the class of random…

概率论 · 数学 2007-05-23 Zengjing Chen , Tao Chen , Matt Davison

In this paper, we investigate risk minimization problem of derivatives based on non-tradable underlyings by means of dynamic g-expectations which are slight different from conditional g-expectations. In this framework, inspired by [1] and…

投资组合管理 · 定量金融 2012-08-13 Tianxiao Wang

If prices of assets traded in a financial market are determined by non-linear pricing rules, different versions of the Call-Put Parity have been considered. We show that, under monotonicity, parities between call and put options and…

理论经济学 · 经济学 2022-03-31 Lorenzo Bastianello , Alain Chateauneuf , Bernard Cornet

This papers addresses the stock option pricing problem in a continuous time market model where there are two stochastic tradable assets, and one of them is selected as a num\'eraire. It is shown that the presence of arbitrarily small…

证券定价 · 定量金融 2014-10-01 Nikolai Dokuchaev

We obtain an elementary characterization of expected utility based on a representation of choice in terms of psychological gambles, which requires no assumption other than coherence between ex-ante and ex-post preferences. Weaker version of…

综合经济学 · 经济学 2024-11-05 Gianluca Cassese

We provide a model-free pricing-hedging duality in continuous time. For a frictionless market consisting of $d$ risky assets with continuous price trajectories, we show that the purely analytic problem of finding the minimal superhedging…

数理金融 · 定量金融 2019-07-29 Daniel Bartl , Michael Kupper , David J. Prömel , Ludovic Tangpi

We consider fundamental questions of arbitrage pricing arising when the uncertainty model is given by a set of possible mutually singular probability measures. With a single probability model, essential equivalence between the absence of…

综合金融 · 定量金融 2016-11-26 Patrick Beißner

In exponential semi-martingale setting for risky asset we estimate the difference of prices of options when initial physical measure $P$ and corresponding martingale measure $Q$ change to $\tilde{P}$ and $\tilde{Q}$ respectively. Then, we…

概率论 · 数学 2018-03-14 L. Vostrikova

We consider an incomplete multi-asset binomial market model. We prove that for a wide class of contingent claims the extremal multi-step martingale measure is a power of the corresponding single-step extremal martingale measure. This allows…

数理金融 · 定量金融 2023-03-01 Jarek Kędra , Assaf Libman , Victoria Steblovskaya

This article studies the problem of utility maximization in an incomplete market under a class of nonlinear expectations and general constraints on trading strategies. Using a $g$-martingale method, we provide an explicit solution to our…

数理金融 · 定量金融 2025-01-30 Wahid Faidi

In this paper, we study the pricing of contingent claims under G-expectation. In order to accomodate volatility uncertainty, the price of the risky security is supposed to governed by a general linear stochastic differential equation (SDE)…

概率论 · 数学 2013-03-19 Mingshang Hu , Shaolin Ji

We are interested in the existence of equivalent martingale measures and the detection of arbitrage opportunities in markets where several multi-asset derivatives are traded simultaneously. More specifically, we consider a financial market…

证券定价 · 定量金融 2021-11-23 Antonis Papapantoleon , Paulo Yanez Sarmiento

A stochastic model for pure-jump diffusion (the compound renewal process) can be used as a zero-order approximation and as a phenomenological description of tick-by-tick price fluctuations. This leads to an exact and explicit general…

证券定价 · 定量金融 2012-02-21 Enrico Scalas , Mauro Politi

Model risk measures consequences of choosing a model in a class of possible alternatives. We find analytical and simulated bounds for payoff functions on classes of plausible alternatives of a given discrete model. We measure the impact of…

数理金融 · 定量金融 2023-02-20 Roberto Fontana , Patrizia Semeraro

In a discrete-time financial market, a generalized duality is established for model-free superhedging, given marginal distributions of the underlying asset. Contrary to prior studies, we do not require contingent claims to be upper…

证券定价 · 定量金融 2019-09-17 Arash Fahim , Yu-Jui Huang , Saeed Khalili

In this paper we give sufficient conditions guaranteeing the validity of the well-known minimax theorem for the lower Snell envelope with respect to a family of absolutely continuous probability measures. Such minimax results play an…

概率论 · 数学 2017-08-30 Denis Belomestny , Volker Kraetschmer

We derive sufficient conditions for the convex and monotonic g-stochastic ordering of diffusion processes under nonlinear g-expectations and g-evaluations. Our approach relies on comparison results for forward-backward stochastic…

概率论 · 数学 2022-04-13 Sel Ly , Nicolas Privault
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