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Comparative Analysis of Stock Price Simulation and its European-Styled Call Options |
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PP: 887-891 |
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Author(s) |
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Yujie Cui,
Bingxing Liu,
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Abstract |
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| With the popularization of computer application technology, simulation in finance has become an important method for financial risk management. We’ll start with the application of the random walk model in simulation of stock price. Then, we’ll provide an analysis of the rate of return of China Petroleum, the biggest listing corporation in China, and a simulation of it. Furthermore, we obtain expressions of European-styled call options based on Ito’s lemma. And then a simulation is made. We analyze the effect of the variance of stock simulated price and the time for European-styled call options which have a critical and practical significance in building refined pricing model for the financial derivation. |
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