1. Introduction
Factors that impact on option prices include the market price of assets, exercise price, maturity, the stability or fluctuations in asset prices, risk-free interest rate, dividends paid in the validity period of the option (mainly impact on stock options) and options trading cost. Option pricing model is just the mathematical model which considers the above-mentioned factors as parameters. ...............
Contents
1. Introduction 1
2. Literature Review 2
2.1 classical option pricing model with transaction costs 2
2. 2 Binomial option pricing model with transaction costs 4
2.3 Option pricing with other research techniques 7
3. European option
www.51lunwen.org pricing model with transaction costs 8
3.1 Black-Scholes option pricing model 8
3.2 European option pricing model with transaction costs 10
4. Numeral example: Transaction costs with the option pricing model 14
5. Conclusion 17
Reference 18
Reference
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