Abstract:

Until now there exists no universally accepted security pricing model that can exactly describe the beha-viors of real stock prices.In this paper,a new security pricing model-stochastic-volatility pricing model with jump and feedback- is proposed by considering the fact neglected by the traditional pricing models that important events frequently happen in the financial market.The interaction between investors and security prices is also taken into
account.Theoretical analyses,numerical simulations and practical applications all indicate that the proposed model can simulate the complex behaviors of real security prices better than the traditional models and has the merits of high precision and efficiency in prediction.

Key words: stochastic volatility, jump, feedback, security pricing, numerical simulation