ARTICLE
Volume 9,Issue 8
18 June 2021
Real Estate Exotic Options based on Black-Scholes Model (BSM)
Yihang Dong ,
Weixin Zhang ,
Yixuan He
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1
University of Sydney, Australia,
2
University of Sydney, Australia,
3
University of Sydney, Australia,
PBES 2021 , 4(3), 36–40;
https://doi.org/10.26689/pbes.v4i3.2187
Abstract
This paper analyzed the issue of high housing prices in China in view of exotic options using the traditional BSM and improved it while applying it to the current situation in the real estate market. A certain set time frame in the purchase of the options with real estate prices was designed in the implementation of exotic option pricings to ease the speculative pressures caused by high housing prices.
References
Black F, Scholes M, 1973, The pricing of options and corporate liabilities. Journal of political economy, 81(3): 637-654.
Merton RC, 1973, Theory of rational option pricing. The Bell Journal of economics and management science, 1973: 141-183.
Cox JC, Ross SA, Rubinstein M, 1979, Option pricing: a simplified approach. Journal of Financial Economics, 7(3): 229-263.
Figlewski S, Bin G, 1999, The adaptive mesh model: a new approach to efficient option pricing. Journal of Financial Economics, 53(3): 313-351.
Longstaff FA, Schwartz ES, 2001, Valuing American options by simulation: a simple least-squares approach. Review of Financial studies, 14(1): 113-147.
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