Financial Derivatives Pricing: A Comparative Study – Complete Phd and Masters Thesis

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Introduction

Financial derivatives have become an essential tool for risk management and investment in today’s global financial markets. The pricing of financial derivatives is a crucial aspect that directly impacts the profitability and risk exposure of market participants. As such, understanding the various pricing models and methodologies used in valuing these complex instruments is of utmost importance.

This thesis aims to conduct a comparative study of financial derivatives pricing, focusing on different pricing models and approaches utilized in the industry. By analyzing and comparing these pricing methods, this research seeks to provide insights into the strengths and weaknesses of each model and identify the factors that influence pricing accuracy and efficiency.

Chapter One: Introduction
1.1 Introduction
1.2 Background of study
1.3 Problem Statement
1.4 Objective of study
1.5 Limitation of study
1.6 Scope of study
1.7 Significance of study
1.8 Structure of the Thesis
1.9 Definition of terms

Chapter Two: Literature Review
2.1 Overview of financial derivatives
2.2 Pricing models for financial derivatives
2.3 Black-Scholes model
2.4 Binomial options pricing model
2.5 Monte Carlo simulation
2.6 Market-based pricing models
2.7 Other pricing models and approaches
2.8 Empirical studies on financial derivatives pricing
2.9 Critique of existing literature
2.10 Gaps in the literature

Chapter Three: Research Methodology
3.1 Research design
3.2 Data collection methods
3.3 Sample selection
3.4 Variables and measurement
3.5 Data analysis techniques
3.6 Model validation
3.7 Assumptions and limitations
3.8 Ethical considerations

Chapter Four: Discussion of Findings
4.1 Overview of findings
4.2 Comparison of pricing models
4.3 Factors influencing pricing accuracy
4.4 Empirical results
4.5 Implications for practitioners
4.6 Recommendations for future research
4.7 Limitations of the study
4.8 Conclusion

Chapter Five: Conclusion and Summary
5.1 Summary of key findings
5.2 Contribution to existing knowledge
5.3 Implications for the industry
5.4 Limitations of the study
5.5 Recommendations for future research
5.6 Conclusion

Thesis Overview

Financial derivatives are complex financial instruments that derive their value from underlying assets, interest rates, or indexes. The pricing of these derivatives is essential for investors, traders, and financial institutions to make informed decisions regarding risk management, portfolio optimization, and investment strategies. This thesis conducts a comparative study of financial derivatives pricing, analyzing and comparing various pricing models and methodologies used in the industry.

Chapter one provides an introduction to the topic, outlining the background, problem statement, objectives, limitations, scope, significance of the study, structure of the thesis, and definition of key terms. Chapter two reviews the existing literature on financial derivatives pricing, covering pricing models such as Black-Scholes, binomial options pricing, Monte Carlo simulation, and market-based approaches. The chapter also discusses empirical studies, critiques, and identifies gaps in the literature.

Chapter three details the research methodology, including research design, data collection methods, sample selection, variables, data analysis techniques, model validation, assumptions, limitations, and ethical considerations. Chapter four presents the discussion of findings, comparing pricing models, analyzing factors influencing pricing accuracy, presenting empirical results, implications for practitioners, recommendations for future research, and conclusions. This chapter also acknowledges the limitations of the study.

Chapter five concludes the thesis by summarizing key findings, discussing the contribution to existing knowledge, implications for the industry, recommendations for future research, and concluding remarks. This thesis aims to contribute to the understanding of financial derivatives pricing and provide insights for market participants to enhance their pricing strategies and risk management practices.

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