Question: A. Explain how an increase in interest rates affected Bear Stearns adversely. B. What is the difference between Asian options and lookback options? C. What

A. Explain how an increase in interest rates affected Bear Stearns

A. Explain how an increase in interest rates affected Bear Stearns adversely. B. What is the difference between Asian options and lookback options? C. What are the two important features that distinguishes the risk-neutral world from the real world (objective world)? D. What are the possible explanations for the commonly observed volatility smirk in equity options? E. Provide an example of a Bermuda option

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