Rough ▇▇▇▇▇▇ Model Clause Samples

Rough ▇▇▇▇▇▇ Model. ‌ One of the most famous and heretofore widely employed stochastic volatility models is the (classical) ▇▇▇▇▇▇ model [H93] dSt = √VtStdWt (1.6) dVt = λ (V −θ )dt + ν√VtdBt (1.7) for which the characteristic function of the log stock price can be found in semi-closed form: ( ) = ( ) + ( ) log E epXt V f p t λθ ∫ t f p s ds (1.8) where f (p, t) solves the non-linear Riccati equation with initial condition f (p, 0) = 0: ∂t f (p, t) = 1 (p2 − p) + (pρν −λ ) f (p, t) + 1 ν2 f (p, t)2 (1.9)
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