## CHECK THESE SAMPLES OF On the Numerical Solution of Black-Scholes Equation

...by constructing a map that can be used in future. The **Black**-**Scholes** model is a partial **solution** for difference **equation**. This model is at times known as closed or analytical approach to option pricing. **Black**-**Scholes** model mainly solves possible options under presumed condition. Therefore, binomial induces the price options where as **black**-**scholes** deduces the price options. Same theoretical foundations and assumptions form the basis of these models like the risk-neutral valuation theory and geometric Brownian motion theory of stock price behavior. The **Black**-**Scholes** model...

8 Pages(2000 words)Essay

...? **Numerical** Precision **Numerical** precision Floating point numbers Floating point numbers arethe most common way of representing real numbers in computers in recent times. The numbers are mostly represented in a scientific notation which includes a base number and an exponent. For instance, 123.46 can also be expressed as 1.23456 x 102. Floating point numbers range from 1,000,000,000,000 to 0.0000000000000001. In the expression of floating point numbers, they are expressed in a normalized manner in which the radix point is put after the non-zero digit Storage in memory Floating point numbers are stored in computer memory in 4 bytes i.e. 32 bits. Floating point numbers is composed of two components that is,...

4 Pages(1000 words)Assignment

...? **Numerical** Precision **Numerical** precision. Floating-point arithmetic is reflected as an obscure issue by alot of persons because it is universal in a computer scheme. Every language almost has a floating-point data type, meaning computers that consist from PCs to supercomputers of floating-point accelerators, compilers would oftenly be needed to compile floating-point procedures and then almost every operating system should answer to floating-point exclusions like excess. This paper discusses the aspects of floating-point computer scientist should know to avoid some petty mistakes than can rather cost him a lot. Goldberg (1991) states that discrete mathematics is what distinguishes old computers from scientific computing. He adds... that...

5 Pages(1250 words)Research Paper

...College level Utopia and Cold **Equation** book analysis, comparison, and contrast. The two books clearly represent two different worlds each with its own way of living. Utopia illustrates an island found on planet earth where people have good and admirable life. The cold **equations** tell of a story of the world on the space as people travel to other planet, which does not have an appealing lifestyle. In the utopian world there is no private property, everything is owned communally. People farm together, their goods are stored together in warehouses, and everyone has access without having to ask for it (More 20). While in the world represented in The Cold **Equation** various things are privately...

5 Pages(1250 words)Essay

...**Numerical** analysis The **solution** of differential **equations** often can not be limited to simple trivial methods. A number of **equations** can be solved analytically including systems of **equations** and **equations** of higher degree. But nevertheless there exist a big number of real problems where differential **equations** which describe the state of real-time processes can not be solved using simple differentiation and integration rules. These types of problems (especially systems of differential **equations**) are solved **numerically** using a number of similar algorithms which are based on the principles of...

6 Pages(1500 words)Math Problem

...
Computer **Numerical** Control
Computer **Numerical** Control (CNC) popularly known as **Numerical** Control (NC) is the automatic control that is integrated into mechanical tools and equipments used in manufacturing mass products. These automated instructions are abstractly encoded into a program that is used as a language by the tools. These machines were introduced in the 1940s and their gross use was initiated in the 1950s although these did not use the modern computation language that is afforded by computer programs. However, in the modern times, the machines have been well developed so that little man power is needed. End to end designs of the components have been highly developed and the...

3 Pages(750 words)Essay

...Civil Engineering **Numerical** Analysis The governing **equation** for the given problem is ; ; The **solution** to the above **equations** can be determined using the Galerkin Method. According to Galerkin method the **solution** of for the above **equation** is obtained using a test function v.
with u =0 and v=0 at x =0 and integrating by parts following **equations** are obtained
(1)
Thus this indicates that for u(x) as the **solution** for displacement in the bar the left hand side of this **equation**. The linear interpolation functions chosen 3 node bar elements given as shown below
1 2 3
The unknown U is defined across the problem domain using the interpolation functions N1, N2 and N3 as U= N1U1 + N2 U2 + N3 U3.
The interpolation... ...

2 Pages(500 words)Assignment

...of ways namely:
1. In calculation of volume, area, mass and length: Integration is basically applied in Physics and Mathematics. With integration, it is possible to describe the curved area of a plane in terms of functions, and area and perimeter, in terms of integrals. Integration is also used to calculate the mass of an object where the density of the matter within it can change from place to place (“Integrals at Work”).
2. In launching Spacecrafts: Integration is applied in solving **equations** that yield the most excellent aerodynamic shape for the body of a spacecraft.
3. In calculation of population growth: Systems of **equations** used to calculate population growth apply integration at some point in...

2 Pages(500 words)Research Paper

...**NUMERICAL** PROBLEM Du Pont analysis is a financial ratio that is based on the return on equity ratio. It analyses the ability of a firm to increase its return on equity by analyzing total asset turnover, profit margin and financial leverage.
Return on Equity= profit margin x Total Asset Turnover x financial leverage factor
ROE= 3.8%x2.1x302= 25.5%
2.
Ratio
Formula
Calculation
Return on assets (ROA)
Net income/total assets
1218/9869= 12.3%
Current ratio
Current assets/current liabilities
3945/3456= 1.14
Days cash on hand
Cash/ ([operating expense - depreciation expense]/365).
2737/(27395-367-385)/365
= 37.50days= 38days
Average collection period
(365*net premiums receivables)/premiums...

1 Pages(250 words)Speech or Presentation

....
T is time to maturity
Is the remaining lifespan of an option
X is the option strike price
The price at which call option can be exercised
AND
While
Therefore,
σ is the daily stock volatility
Is the level of deviation of a trading value series over time
Question Two
2. We are now interested in measuring the dollar change in the value of the option when the value of the stock changes. This amount is called “Delta” of the option:
Using the **Black**-**Scholes** formula, compute the Delta of a European call
From the **Black**-**Scholes** formula for a European call option today
t=0
Time to maturity t = T
Constant rate =(r ),
Constant volatility=(σ)
Strike price= K as:
**EQUATION** 1
&
C0 is the theoretical call value
S... ...

2 Pages(500 words)Assignment