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Great one! I just have one question Black-Scholes model uses constant volatility. What do you mean by this? Because volatility changes when we apply iteration.
@@analystprep 4:25 , it is different way of writing normal distribution. Written as N(u , variance) is the formal way, Written as N(u , Stdev) in the textbook is understood. At 6:09 the confidence interval is calculated correctly with stdev
(SD) x (Root of T) which is given in the textbook is just the root of (SD²) x (T) which is shown in this video. so, the textbook one gives you the standard deviation and the one here gives you the variance. it's basically the same thing.
What a man!!!
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This should be the nobel prize. Thx.
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Thank you!
Great explaination! Always grateful.
Your teaching is an "Absolute beauty", professor.
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amazing help. thank you so much
Nicely explained! Lot of thanks.
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Wonderful !!! THANK YOU SO MUCH !!!
Glad you like it!
very simplified and helpful.
thank you!!
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Great work! Thank you for sharing!
You're welcome!
Thank you very much Professor Forjan
I would have failed all my units if I didn't have these videos to teach me, I sincerely thank you.
Great one! I just have one question Black-Scholes model uses constant volatility. What do you mean by this? Because volatility changes when we apply iteration.
Thank you Professor Forjan. We need more videos from you.!
Well done
Thank you!
@@analystprep I wanna ask something. Why when you add one more step on the binominal tree the option value increase??
5:55 "Since lnSt is log-normally distributed". Isn't this wrong? lnSt is normally distributed as St is log-normally distributed.
Great class so nicely explained sir
in the textbook the the black scholes model variance is SD• root of T, but here it’s using SD^2
Hi Venus. Could you give us a timestamp?
@@analystprep 4:25 , it is different way of writing normal distribution. Written as N(u , variance) is the formal way, Written as N(u , Stdev) in the textbook is understood. At 6:09 the confidence interval is calculated correctly with stdev
(SD) x (Root of T) which is given in the textbook is just the root of (SD²) x (T) which is shown in this video.
so, the textbook one gives you the standard deviation and the one here gives you the variance.
it's basically the same thing.
@@rutammokashi2146 Its not the same thing. Here it is sigma square * square root of T but textbook, it is sigma square * T
@@ishankjain2393 I think its an error.
Why is return on time value different in d1 and d2?
The lognormal the return not simply stock price
Why do we use the model to price option
thank you, prof J
You simplified that so well! Thank you!
You're welcome!