TheBlack-ScholesModel

TheBlack-ScholesModel The basic model Two assets: { The cash bond fB tg 0; if the risk-free interest rate is a constant rand B0 = 1, then Bt= ert;t 0. { A risky asset with price fS tg 0; we assume that under the market probability measure P, fS tg 0 is geometric Brownian motion: ................
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