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Black-scholes versus artificial neural networks in pricing call warrants: The case of China market

  • Beihang University

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

The back-propagation neural network is used to pricing call warrants, and the input variables of network model are investigated. The market call warrants prices quoted on Shanghai Stock Exchange and Shenzhen Stock Exchange are used to train and simulate the network model. The results show that the performances of the proposed network model produce better call warrant prices than Black-Scholes, and better depict the price characteristics of China's call warrants. The pricing error of Black-Scholes is detailed analyzed, and the market particularities of China's call warrants with different contract terms and price characteristics are also discussed.

Original languageEnglish
Title of host publicationProceedings - Third International Conference on Natural Computation, ICNC 2007
Pages528-532
Number of pages5
DOIs
StatePublished - 2007
Event3rd International Conference on Natural Computation, ICNC 2007 - Haikou, Hainan, China
Duration: 24 Aug 200727 Aug 2007

Publication series

NameProceedings - Third International Conference on Natural Computation, ICNC 2007
Volume1

Conference

Conference3rd International Conference on Natural Computation, ICNC 2007
Country/TerritoryChina
CityHaikou, Hainan
Period24/08/0727/08/07

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