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To: Lizzie Tudor who wrote (64182)6/6/2003 2:34:06 PM
From: rkral  Read Replies (1) | Respond to of 77400
 
OT .. Lizzie, re "I only postulated that interest rates will stay low on further expansion of the definition of risk premium."

Huh? We were talking about volatility. Interest-rate risk was not even on the table when you posted 4 links as support for your usage of *risk premium* term as regards options. And none of the 4 links said anything about interest rates, as I recall. And now you post almost entirely about interest rates. That sure looks like a pointless diversion to me.

re "*further expansion of the definition of risk premium". LOL. Whose definition? Yours? And who is expanding the definition? You? LOL!!!

GVTucker and I both are telling you risk premium *is not* part of the Black-Scholes model. I think John Shannon implied the same when he told you "we just think you don't know what you are talking about". If you don't believe us, read McMillan's "Options as a Strategic Investment". It is arguably the Options Bible, and AFAIK, it does not use the term "risk premium" in regard to options.

So now it's "that's it from me on this topic" .. and you again haven't learned a thing .. apparently. Sad. Very sad.

Ron