The Partial Distribution: Definition, Properties and Applications in Economy
AbstractIn this discussed draft, we want to present the Partial Distribution (F.Dai, 2001) for discussing. We compare the partial distribution with lognormal and levy distribution. Though the levy distribution is better to describe the prices distribution of stock and stock indexes in a moderately large volatility range, the lognormal is better in a region of low values of volatility. We shall try to elucidate that the Partial Distribution is better than lognormal distribution in many respects. From partial distribution, we can acquire lots of interesting results, such as, describing the probability that stock price become zero if corresponding company collapses or the commodity price become zero if it lapses, expressing the average selling price of a commodity or stocks as the cost and average profits, and offering the accurate analytic model of American puts options pricing, etc. there are some related studies in appendix.
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Length: 11 pages
Date of creation: 24 Mar 2004
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partial distribution; economic analysis; commodity pricing; American puts option; accurate pricing formula;
Find related papers by JEL classification:
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
- C5 - Mathematical and Quantitative Methods - - Econometric Modeling
- C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-28 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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