# Simulation of Geometric Brownian Motion

The Black-Scholes Formula for Pricing Stock Options. X(0) = x0 The present value of the stock. X(t) Price of the stock at time t The discount factor. e- tX(t) Present value of the stock at time t. X(t) 0 ≤ t ≤ T "A gambling experiment" Types of Wagers. Stock Wager: Can buy and sell any time s < t (multiple times) Option Wager: May purchase ... ................
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