Briefly speaking, our conclusion is that stochastic volatility does not make a huge difference as far as the pricing is concerned if you get the average volatility right. It makes a big difference as far as hedging is concerned.
John HullRelated Authors
Topics
Quotes currently Trending
There is in nature a parallel unity which corresponds to the unity in the mind and makes it available. This methodizing mind meets no resistance in its attempts. The scattered blocks, with which it strives to form a symmetrical structure, fit. This design following after finds with joy that like design went before. Not only man puts things in a row, but things belong in a row.
Ralph Waldo Emerson