Abstract
Derivatives1 are instruments whose payoffs depend on the movement of underlying assets. The price or value of the derivative instrument can therefore be evaluated by creating and valuing a portfolio of assets whose prices are easily observed in the market and whose cash flows replicate those of the option.
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© 2014 Jawwad Ahmed Farid
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Farid, J.A. (2014). Derivative Pricing. In: Models at Work. Global Financial Markets. Palgrave Macmillan, London. https://doi.org/10.1057/9781137371645_20
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DOI: https://doi.org/10.1057/9781137371645_20
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-47570-4
Online ISBN: 978-1-137-37164-5
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)