So, i'm fairly sure that for what i'm doing I can't use Black-sholes... one of the prices i am working with is electricity, and since this is (for the most part) non-storable it creates a non-hedgeable risk. Does anyone have any suggestions for an alternative?
Q. There are two rooms. one room contains four lightbulbs: the other, four switches to turn on the lights. You can only be in one room at a time, and you can only enter either room twice. How do you find out which switch is related to which lightbulb?
A. Turn on one switch, leave on for 30...
yes, simulate prices based upon the parameter estimates of the two series... I had planned on simulating the two prices independent, but correlated series sounds like it might be better
hello,
I have several columns of data, all of which are prices... I have calculated the volatilities and the estimated correlations of the prices but I am wondering how I can use this info as input to a simulator using excel.
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