In the option pricing literature, it is well known that:(i) the decrease in the smile amplitude is much slower than standard stochastic volatility models and, (ii) the term structure of the at-the-money volatility skew is approximated by a power-law function with the exponent close to zero....

On May 18, 2014, AT&T Inc., the second-biggest U.S. mobile-phone carrier, agreed to acquire DirecTV, a satellite-television company, for $49 billion in cash and stock. However, the merger’s conditions and terms are complicated as the stock exchange ratio is contingent on the volume-weighted...