The Notion of Arbitrage and Free Lunch in Mathematical Finance
We shall explain the concepts alluded to in the title in economic as well as in mathematical terms. These notions play a fundamental role in the modern theory of mathematical finance. We start by presenting the ideas in a very informal style and then gradually raise the level of mathematical formalisation.
KeywordsAsset Price Option Price Trading Strategy Fundamental Theorem Contingent Claim
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- B 00.
- BS 73.
- DS 94.
- DS 98.
- DS 04.
- HP 81.
- K 81.
- RY 91.