by Cornelis W. Oosterlee, Liexin Cheng, Shuaiqiang Liu, Xue Cheng
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Suggested foundations for options and derivatives pricing and text and language models in finance. Specialist prerequisites vary by paper.
Build replication and risk-neutral probabilities in a tractable model.
Distinguish pricing probabilities from physical forecasts.
Understand how text is converted into numerical inputs.
Check whether labels measure the financial construct of interest.
Connect the pricing equation, closed-form value and implied volatility.
Test whether a text-derived signal survives an honest financial evaluation.
Measure agreement when constructing or checking labels.
Start in discrete time, move to Brownian motion, then read the original pricing argument and simulate it.