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Thesis

Optimal Selling Strategy With Piecewise Linear Drift Function

Abstract:

In this paper the optimal decision to sell a stock in a given time is investigated when the drift term in Black Scholes setting is a piecewise linear function of time. The goal is to minimize the expected relative error between the discounted selling price and the discounted maximum price over a given time horizon. With the drift changing to a piecewise linear function, we are interested in that if the trend of the stock price changes during the same time horizon, and what would be the impac...

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Publisher:
Mathematical Institute;University of Oxford
Publication date:
2009-07-03
UUID:
uuid:3acbff75-35a3-4026-988e-e94d0099f3ca
Local pid:
oai:eprints.maths.ox.ac.uk:790
Deposit date:
2011-05-20

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