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Global Regularity and Probabilistic Schemes for Free Boundary Surfaces of Multivariate American Derivatives and Their Greeks

Global Regularity and Probabilistic Schemes for Free Boundary Surfaces of Multivariate American Derivatives and Their Greeks

In a rather general setting of multivariate diffusion market models we derive global iterative probabilistic schemes for computing the free boundary and the Greeks for a generic class of American derivative models using front-fixing methods. The convergence of the scheme is closely linked to a proof of global regularity of …