A variational approach for pricing options and corporate bonds

B-Tier
Journal: Economic Theory
Year: 1997
Volume: 9
Issue: 3
Pages: 557-569

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that option prices can always be obtained as the values of simple optimization problems. This easy remark has two consequences: sensitivity analysis is simplified (by applying the envelope theorem) and numerical procedures are improved. We give two examples of applications: options on coupon bonds and corporate bonds.

Technical Details

RePEc Handle
repec:spr:joecth:v:9:y:1997:i:3:p:557-569
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25