http://www.aleablog.com/dumbest-graph-of-the-day/ Alea Jacta Est Sun, 12 Oct 2008 01:39:29 +0000 http://wordpress.org/?v=2.6.2 http://www.aleablog.com/dumbest-graph-of-the-day/#comment-1106 jck Mon, 28 Apr 2008 17:14:30 +0000 http://www.aleablog.com/?p=807#comment-1106 bh: indeed plotting an asset value against a derivative is pretty ridiculous, it yields no information unless you find it surprising that "put" options go up when prices go down. bh:
indeed plotting an asset value against a derivative is pretty ridiculous, it yields no information unless you find it surprising that “put” options go up when prices go down.

]]> http://www.aleablog.com/dumbest-graph-of-the-day/#comment-1105 bh Mon, 28 Apr 2008 16:12:34 +0000 http://www.aleablog.com/?p=807#comment-1105 In the Black-Scholes-Merton contingent claims analysis equity and credit spreads bonds are treated as long/short put options on the assets of the firm. Plotting a proxy for asset value (equity index levels) vs spreads (option values)? Yeah, what a ridiculous idea. In the Black-Scholes-Merton contingent claims analysis equity and credit spreads bonds are treated as long/short put options on the assets of the firm. Plotting a proxy for asset value (equity index levels) vs spreads (option values)? Yeah, what a ridiculous idea.

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