Research Article | OPEN ACCESS
Study on Traditional Pricing Models Based on Terms of Convertible Bonds in China
1Youzhi Zeng and 2Baosen Wang
1Graduate School of Beijing
2Economics School of Beijing, Wuzi University, 101149, Beijing, China
Research Journal of Applied Sciences, Engineering and Technology 2013 12:3341-3345
Received: July 26, 2012 | Accepted: September 17, 2012 | Published: April 10, 2013
Abstract
The study has gotten the conclusion that the binary tree model is more suitable for convertible bonds pricing in China by analyzing terms of convertible bonds in China and deducing traditional pricing models of convertible bonds. The characteristics of terms embedded in convertible bonds decide which pricing models will be elected and which model parameters to be estimated. By analyzing terms of convertible bonds in China, get the expressions of terms value, which are called as terminal conditions and boundary conditions and then deduce the traditional pricing models. Based on the above processes, it can be found that the binary tree model use terminal conditions and boundary conditions better.
Keywords:
Convertible bonds, pricing efficiency, traditional pricing models, terms of convertible bonds,
Competing interests
The authors have no competing interests.
Open Access Policy
This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
Copyright
The authors have no competing interests.
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ISSN (Online): 2040-7467
ISSN (Print): 2040-7459 |
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