by John C. Hull
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Suggested foundations for options and derivatives pricing and stochastic processes and pricing. Specialist prerequisites vary by resource.
Build replication and risk-neutral probabilities in a tractable model.
Distinguish pricing probabilities from physical forecasts.
Understand what it means to condition on current information.
Follow Brownian dynamics and the second-order term in Itô calculus.
Connect the pricing equation, closed-form value and implied volatility.
Translate continuous dynamics into a numerical experiment.
Find your direction, refresh probability, then connect the mathematics to a financial model.