A General Theory of Option Pricing

2018 ◽  
Author(s):  
David Gershon
Author(s):  
Tomas Björk

In this chapter we discuss how a suitable change of numeraire and the corresponding change of martingale measure, can simplify the computation of pricing formula for financial derivatives. We derive a general formula for the likelihood process related to an arbitrary numeraire, and we identify the corresponding Girsanov transformation. As an example, we compute the price of an exchange option. In particular we study the class of forward measures related to zero coupon bonds and we derive a general option pricing formula. As an application of the general theory we also study the so-called numeraire portfolio.


2018 ◽  
Vol 41 ◽  
Author(s):  
Daniel Crimston ◽  
Matthew J. Hornsey

AbstractAs a general theory of extreme self-sacrifice, Whitehouse's article misses one relevant dimension: people's willingness to fight and die in support of entities not bound by biological markers or ancestral kinship (allyship). We discuss research on moral expansiveness, which highlights individuals’ capacity to self-sacrifice for targets that lie outside traditional in-group markers, including racial out-groups, animals, and the natural environment.


1992 ◽  
Vol 37 (11) ◽  
pp. 1225-1225
Author(s):  
No authorship indicated

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