I guess any simple idea that is really good will catch on quickly.

We concluded that you cannot rely on delta hedging alone. It sounds simplistic to say that now, but back then, this was the sort of thing people were only just beginning to realize.

Yes, our tree has an interesting shape. The center branches reflect the shape of the zero curve. When extreme parts of the tree are reached the branching pattern changes to accommodate the mean reversion.

Our starting point then was trying to find a way to incorporate mean reversion into the HoLee model.

Briefly speaking, our conclusion is that stochastic volatility does not make a huge difference as far as the pricing is concerned if you get the average volatility right. It makes a big difference as far as hedging is concerned.

The HoLee model was the first term structure model. I remember reading their paper soon after it was published and as it was fairly different from many of the other papers that I had read, I had to read it quite a few times. I realized that it was a really important paper.

I didn't become interested in derivatives until 1982, 1983.

I think VAR is a very healthy development within the industry.

Alan White and I spent the next two or three years working together on this. We developed what is known a stochastic volatility model. This is a model where the volatility as well as the underlying asset price moves around in an unpredictable way.

The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest rate, but on other interest rates as well.

Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.

In the interest rate area, traders have for a long time used a version of what is known as Black's model for European bond options; another version of the same model for caps and floors; and yet another version of the same model for European swap options.

If each of your time steps is one week long, you are not modeling the stock price terribly well over a one-week time period, because you are saying that there are only two possible outcomes.

I guess any simple idea that is really good will catch on quickly.

We started giving presentations at practitioner conferences in 1986, and since then all of our derivatives research has been stimulated by contact with practitioners.

The problem with interest rates are that you are not modeling a single number, you are modeling a whole term structure, so it is a sort of different type of problem.

There are challenges in terms of the measurement of VAR for what are known as nonlinear derivatives, where things like gamma and vega are important dimensions of the risk.

Our tree is actually a tree of the short-term interest rate. The average direction in which the short-term interest rate moves depends on the level of the rate. When the rate is very high, that direction is downward; when the rate is very low, it is upward.

One important measurement issue concerns the fat tails problem that I mentioned earlier. VAR is concerned with extreme outcomes. If the tails of the probability distributions we are using are too thin, our VAR measures are likely to be too low.

When interest rates are high you want the average direction in which interest rates are moving to be downward; when interest rates are low you want the average direction to be upward.

I became hooked on the idea of being able to shoot an image and process it myself, and end up with a product.

After I'd produced about two dozen pen and ink drawings, one evening I decided that they needed poems to accompany them. I still have no idea where that notion came from, but it took me about two hours to produce verses for these creatures.

Yeah, that's what kind of, we get the idea a little bit yeah, because other people from different countries also try as hard as they can to get a medal or a gold medal in the Olympic Games. And you know, if they can work hard, we can work hard as well.

What's fascinating is that when you write a script, it's almost a stream of consciousness. You have an idea that it means something, but you're not always sure what. Then when you get on the set, the actors teach you.

I also do not like the idea of soft money, these issue ads - people don't know where the money is coming from, millions and millions of dollars outside of the control of a candidate - there's no accountability.

From the beginning, the series has been story driven - I began with a story idea - but research feeds it.

Then I decided I couldn't just crawl in the corner and die, so I started putting pen to paper and wrote some songs. I had no idea what for or who I was going to work with. I tried to find my way and direction.

The idea is, if I can't heal from my art, then how can you heal?

There is sometimes a peculiar confusion in the West that equates progress to whatever is recent or whatever is new, and it is time we understood that progress has nothing to do with the chronology of an idea.

The idea of licking stamps seemed great fun for me.

Learn about the world, the way it works, any kind of science and anthropology, it's really an interesting place we live in. Evolution is a really fantastic idea, even more than the idea of God I think.

It's slightly complicated for people to grasp the idea of a head of state in human form.

As far as I know, only a small minority of mathematicians, even of those with Platonist views, accept the idea that there may be mathematical facts which are true but unknowable.

So my idea of neurotic is spending too much time trying to correct a wrong. When I feel that I'm doing that, then I snap out of it.

I'm into the idea of responsibility and edification and these things have found me and I have found them. I wanted to be in the movie and I made it known to Mike.

Religion has caused more harm than any other idea since the beginning of time. There's nothing good I can say about it. People use it as a crutch.

Many of the Europeans who want Israel to go away don't even know why they do. Nearly a third of those interviewed concede they have no idea what the Israeli-Palestinian conflict is all about. It's enough to know that Israelis are Jews.

It was an idea we had when Al was in the Senate - to organize and moderate an annual conference that would look at government policy through the lens of the family to help identify ways that the family can be supported and strengthened.

Growing up in Hollywood it seemed like every kid was the child of some star. We had no idea that other people would think we were special, because there was no other lifestyle to compare it to.

When employers tell me they prefer married men, and encourage their men to have homes of their own, because it makes them so much steadier, I wonder if they have any idea of all that that implies.

As a matter of fact they'd blacken us down. I guess there's a reason that according to what the Caucasian wanted us to look like. He wanted us to look-if we were Black, then he had his idea of what we look like.

All my pictures are built around the idea of getting in trouble and so giving me the chance to be desperately serious in my attempt to appear as a normal little gentleman.

I understand about this idea of terror and what it means to Americans and this idea that we can't just walk around free like we did; life has changed.

In The Name of the King is the right title. To be honest, I don't know who had the final idea for the title but I liked it and it has a strong connection to the movie's story.

Yeah, I had an idea to make a very scary movie, based on a kind of serial murderer that preys on tourists.

When an idea exclusively occupies the mind, it is transformed into an actual physical or mental state.

Well, it was actually - I brought the idea of doing a documentary to HBO back in 2000, when there were some press reports sort of were bandied about that there were going to TV movies based on some of the books that were out.

When you left on Saturday, I felt a horrible void, I saw you everywhere, on the beach, in your room, in the garden: impossible for me to get used to the idea that you had left.

The due process of law as we use it, I believe, rests squarely on the liberal idea of conflict and resolution.