Option Valuation: Normal and Lognormal Distributions
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Option Valuation: Normal and Lognormal Distributions

Updated Jun 15, 2024

What you'll learn

  • We look at normal, and lognormal probability distributions, discuss the effects of volatility on option valuation, and introduce the concepts of the Markov property and the square root of time.
Course Description

In order to predict future asset prices, we must look at the probability that a price will move to a certain level. We look at normal, and lognormal probability distributions, discuss the effects of volatility on option valuation, and introduce the concepts of the Markov property and the square root of time.