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Arbitrage-free Scenario Generation in Financial Optimization
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Arbitrage-free Scenario Generation in Financial Optimization

Wiley StatsRef: Statistics Reference Online
Wiley
2017
Handle:
https://hdl.handle.net/10863/4074

Abstract

Absence of arbitrage is an essential requirement for asset return scenarios used as the basis for financial optimization. We describe two approaches that can be used to arrive at arbitrage-free scenarios, together with theoretical results on their feasibility or existence in the form of restrictions on the sample size.
url
http://onlinelibrary.wiley.com/doi/10.1002/9781118445112.stat07925/abstract;jsessionid=777EF2B836B975AB2DA3C294E21ABBF8.f04t04View

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