DER 02.1 Valuation-by-replication

Derivatives contract valuation and risk management depends on a single key economic assumption—individuals prefer more wealth to less wealth. If they do, the perfect substitutes must have the same price. 

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• Required reading

  • Whaley 2024, Utility theory

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• Lecture notes

  • Slides

  • ​Supporting files​

    • Value to call.xlsx

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