Strike price range

Now, this integral can be computed very accurately and computationally fast for a wide range of (log) strike prices by running standard Fourier inversion techniques. 

In section (5.2.1), we have derived the closed-form solution for the price of a zero-coupon bond option. Then, later on in section (5.2.2) we introduced the FRFT-technique and showed that this method works excellent for a wide range of strike prices by solving the Fourier inversion numerically. Now, we show that also the IFF is an efficient and accurate method to compute the single exercise probabilities (see section (2.2)) for a G 0,1 via... 

To this aim, a recent study conducted by the FAO (HLPE, 2011) showed how in less than one decade, the world biofuel production has increased five times, from less than 20 billion liters/year in 2001 to over 100 billion liters/year in 2011. The steepest rise in biofuel production occurred in 2007/2008, concomitantly with a sharp rise in food commodity prices (HLPE, 2011). However, as observed by Sims et al. (2010), estimations of the actual effect of biofuels on food price varies a lot some studies found on average, that the increase of food prices linked to the use of biofuels ranges from 15% to 25% of the total food price increase other studies on the contrary, conclude that there is no relationship whatsoever. Even more striking, some authors argue that biofuels are responsible for 75% of the increase observed in food prices (Chakrabortty, 2008). 

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