SYLLABUS  Previous: 3.6 Computer quiz  Up: 3 FORECASTING WITH UNCERTAINTY  Next: 3.8 Further reading and

## 3.7 Exercises

3.01 Price estimate for a European call.
3.02 Convergence study using trees.
3.03 American put calculated with a tree.
3.04 Stock option with a dividend yield.
3.05 Stock option with transaction costs.
3.06 Bond option with forward contracts.
3.07 Convertible bond option.
3.08 Forecast mean and bounds for a share price.
3.09 Binomial tree for bonds.

All these problems can be edited and submitted for correction by selecting WORK:assignments on the course main page. They generally open with a template that provides useful advice and guidance to derive the solution. The color coding corresponds to the expected level of difficulty:

Easy.
The problem is a direct application of the theory in a situation of practical interest: solutions typically combine text without formulas, ASCII plots and parameters of the VMARKET applet without any programming.
Moderate. generally be solved with a short analytical derivation, a discussion of the result, a plot parametric dependencies.
Difficult. The problem is an extension of the material discussed in the syllabus and requires a good command of the mathematical language, which can be expected for university graduates from quantitative fields.

SYLLABUS  Previous: 3.6 Computer quiz  Up: 3 FORECASTING WITH UNCERTAINTY  Next: 3.8 Further reading and