December 17th, 2002, 3:47 am
QuoteOriginally posted by: HamiltonThere are even some occasions when both prosecution and defence should positively suppress the facts in favor of probability, if the facts are improbable. Never mind the truth -- pursue probability through thick and thin in every kind of speech; the whole secret of the art of speaking lies in consistent adherence to this principle.This almost strikes me as the perfect definition of the "science of derivatives pricing" that I am pursuing in another thread- "Never mind the reality of the underlying process, you may even bracket it, just pursue probability through the consistent relation between derivatives prices."(Actually, "risk-neutral probability" - which is to my mind the generalisation of the concept of Probability, much in the same way as markets are the generalisation of reality - is just another word for "consistent & arbitrage-free relation between derivatives prices").- "In other words, the science of derivatives pricing is like the science of speech, rhetorical not really theoretical, and even less so, metaphysical (in the sense of "narrow and truthful correspondance with the facts").Thank you, Hamilton.
Last edited by
DoubleSix on December 16th, 2002, 11:00 pm, edited 1 time in total.