**Financial processes, 2014/15 spring semester**

## Requirements for the first test

definition of PUT and CALL options, price them on a binary tree (for several days as well)

change of probability measure for random variables (you don't need to know the change of measures for stochastic processes for this test)

conditional expected value, calculation on discrete cases

apply Ito-formula, multidimensional case as well, properties (it is maringale, izometric property, etc.)

modeling stock price with geometric Browninan motion, integral and derivate formula

Meaning of the letters in Black-Scholes-Merton theorem

price of a Forward contract, put-call parity

Theorems and methods from homeworks