Afterword

Abstract

Let us now take stock of some of the most important things we have learned. To begin with, there is no denying that derivative pricing is an exciting subject. The quality that can make any quantitative subject thrilling is the pure power of mathematics leading to simple conclusions that otherwise seem impossible or counterintuitive. Famous examples come from physics: quantum theory and relativity lead to remarkable unexpected conclusions about the true nature of our world. Quantitative finance, in its own small way, contains one of these thrilling insights. Whoever would have thought that, in a Black—Scholes world, we can provide a trading strategy to exactly replicate any derivative payout?