New mixing fractions enhance accuracy in pricing exotic options.
The article introduces two new ways to adjust a model that predicts prices of complex financial options. By using these adjustments, the model can better match the prices of certain exotic options in the market. The adjustments help to improve the accuracy of the model without affecting its ability to predict the prices of simpler options. However, when the improved model is used to predict the prices of other exotic options, it doesn't always match the actual market prices. This suggests that either the market prices are not consistent, or the model doesn't perfectly capture how prices change over time.