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Risk Neutral Probabilities
Hi All,I am new to the quant finance and I have a question regarding risk neutral probability.From another forum (not wilmott) I came to know abt calculating risk neutral prob while valuing an option with strike K by following way.1. Simulate the price path (diffusion equation) using MC simulation 2. Count the number of times the final price is above K. 3. Divide this number by number of simulation (say 10000). This is the risk neutral probability. Is it right? Please reply.
