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Finance calculation problem involving income in various worlds, needs to be disccussed in four different ways. The variable S is an investment asset providing income
Finance calculation problem involving income in various worlds, needs to be disccussed in four different ways.
The variable S is an investment asset providing income at the rate q measured in currency A and it follows the process: In the real world. Defining new variables as necessary, give the process followed by S, and the corresponding market price of risk, in: A world that is the traditional risk-neutral world for Currency A A world that is the traditional risk-neutral world for Currency B A world that is forward risk-neutral world with respect to a zero-coupon currency A bond maturing at time T A world that is forward risk-neutral world with respect to a zero-coupon currency B bond maturing at time T
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