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In the document attached in the appendix the methods of the sticky delta and the sticky strike have been
mentioned. Explain how these two methods have solved the problems associated to the Black and
Scholes formula and what are the implicit assumptions about the asset dynamic and the smile dynamic
made with these two alternative models. How do you explain their underperformance relative to stochastic
volatility models (such as GARCH models) for describing the implied volatility surface? You will have to
complete the analysis provided in the article with solid arguments and explanations.