The Central Knot

Elie Ayache

Chapter 13 in The Medium of Contingency, 2015, pp 283-299 from Palgrave Macmillan

Abstract: Abstract Is it a coincidence that the binomial tree and Brownian motion should yield a complete market, respectively in discrete time and continuous time? That the market should be complete or incom-plete seems to us so dramatic an alternative, yielding alternative consequences so incommensurate with each other,1 that it cannot depend on picking Brownian motion or the binomial tree among a choice of several available stochastic processes, as if another choice were possible and it was only a coincidence that we had picked Brownian motion or the binomial tree. Brownian motion and the binomial tree seem to us to belong to a category of their own inside which it would no longer be a coincidence if we picked them because they fill it completely — their own special category.

Keywords: Brownian Motion; Trading Strategy; Stochastic Volatility; Implied Volatility; Price Process (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-28656-7_14

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137286567

DOI: 10.1007/978-1-137-28656-7_14

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().