It can be seen that the estimates of β and τ2 were very close to the corresponding simulated values under all the scenarios and the estimates of the shape parameter were slightly inflated. These results show
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1 and 2. Let us stress that a numerical approximation of ϵ∗(T,γ,p,u,d,r,V0) can be achieved by applying a suitable bisection algorithm, while its analytic expression will be the aim of future research. Table 1. Intervals containing ϵ∗(T,γ,p,u,d,r,V0) for T∈{2,...