Do you know the answer?I would guess that you could easily find different distributions for wich the price is the discounted expectation of the payoff of the call. Why should it be unique?

In term of topology, an algebra is much more thant a field. You can look their precise definition in any maths book.The algebra has 3 laws whereas the field has 2, and has also a structur of vector space that a field has not.

You're wrong there are necessarily 2 different numbers, which he called a and b. Yet instead of making totally independant variations you link the variations of the second one to the first one (term r*a) and another variation that is independant (sqrt(1-r^2)*b).

If you don't want to use a solver for the equation (especially in more complicated cases), you can just write in Excel:-98.207.57.5107.5in A1:A4 and find the effective return with =IRR(A1:A4)HTHJungix

<t>Isn't a Brownian motion supposed to take both positive and negative values on any interval [0,t]? If so the probability is 0 for any t>0, whatever small it is.The problem seems different for me if t1>0 car then the question is:- Is Bt1 > 0?- If yes, will it remain positive until Bt2 (which is pos...

That's what I would have done if I had been given only the ODE.Since you're given the solution you can be lazy and just check that it is indeed a solution. That should do it for your homework

That was the idea. Actually you can even draw the circle on the same side as its center without too much trouble now that you've had the idea to fold the paper (of course there should be no line on between the circle and its center but you're free to draw whatever you want on the back.

Haha original solution. That's not the one I expected though. I meant that the pen should stay on the paper all the time.

Here is a little enigma. You have one sheet of paper (white) and a pen. You need to draw a circle (non-zero radius of course) and its center (just a point) without lifting the pen. How do you do this?

What is a MG?In your formula is Z constant or dependant of t?

What is your definition of a BM?

It is not a martingale.E(Xt) <> X0 if Bt<>0

What is the url of this website?

2/3 if you just know that there is at least one boy.

<t>It is not S(t) discountet with an infinite time (which gives 0), but the limit of exp(-rt) max(S(t)-K,0) when t tends to infinity. there was a confusion between t and tau in your notation. As t tends to infinity, so will the stock price (assuming GBM). Do these perpetual options really exist? the...