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Politics : Formerly About Advanced Micro Devices
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To: AK2004 who wrote (28781)2/24/1998 6:24:00 PM
From: Reginald Middleton  Read Replies (2) of 1573221
 
<Stochastic models are used by everyone nower days. I am sure that you have seen Black-Scholes formula which represents closed form solution of the price for European put/call options assuming simple lognormal stochastic process and simplifying assumptions for term structures.>

Maybe you should look into my site. I design structured products and make extensive use of a wide variety of exotics from binary-barrier to swaptions, 73 functional models of which I have freely offered to the public. Since you did not read my posts, you may have missed the fact that you are way off base when it comes to assuming the discount rate and its implementation. Maybe you have spent too much time in school and not enough in actual practice? Using HJM to come up with the cost of capital, come on now - back to reality.

Since you now you have me making posts lacking in content and rich in insult as well I will refrain, as long as you stop making false claims and attempting to attack those with whom you do not agree with.

<Have you ever run any studies on your own on how stable beta is (or APT factors).>

I am negotiating a book deal on the subject as we discuss this. Have you ever looked into a less theoretical and more realistic method of determing the appropriate discount rate?
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