by Hexiang Sun, Yilun Zhang, Yufeng Shi, Zheng Tang
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Suggested foundations for volatility models and surfaces and text and language models in finance. Specialist prerequisites vary by paper.
Follow diffusion-based models and their assumptions.
Separate conditional volatility from observed returns.
Understand how text is converted into numerical inputs.
Check whether labels measure the financial construct of interest.
Study a correlated stochastic-variance model.
Interpret prices across strikes and expiries.
Test whether a text-derived signal survives an honest financial evaluation.
Start in discrete time, move to Brownian motion, then read the original pricing argument and simulate it.