Financial Derivative Analysis

To understand why cryptocurrency is more appealing to investors, following steps are involved:

1. Data Collection

• 1. Gather historical daily data via Yahoo Finance.
• 2. Present the movement of 'ADA-USD' for one-year period.
• 3. Plot the movement of 'ADA-USD' over this time period and its volatility.

2. Methodology

• 1. Apply Binominal Tree and Monte Carlo methodologies on 'ADA-USD' to compare the risks and return to find the better model to use.

3. Analysis

• 1. Greeks were used for analysing risk sensitivity