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The Young Person’s Guide to Pricing and Hedging

An early outtake from my book Models.Behaving.Badly. An attempt to explain the principles of neoclassical finance from a rational point of view, and to point out the assumptions and their potential inapplicability. And no mean-variance optimization!!


Few people have the gift of grasping nature and using it directly: between knowledge and application they prefer to invent a phantom which they develop in great detail; doing so, they forget both object and purpose.

Maxims and Reflections: Goethe



The Young Person’s Guide

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