Option Valuation: Price Drift and Randomness
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Option Valuation: Price Drift and Randomness

Updated May 27, 2024

What you'll learn

  • We discuss the long-term grown rate in the price of an asset and the evolution of the future price of an asset
Course Description

Drift refers to the long-term grown rate in the price of an asset, and randomness refers to the random element of the future price of the asset. The evolution of the future price of an asset consists of a drift component and a random component, and we discuss both here.