How to Model a Financial Asset

This video is part of my series on the Black-Scholes model. It covers the assumptions for how financial assets evolve over time. Basically, the model is also called an Ito-process.

[@cryptogirlusa]

Thank you so much for making this video! I absolutely love everything that has to do with derivatives, Black Scholes and financial contacts. I have been watching all your other videos as well, you’re doing an amazing job! Keep it up! Thank you so much!!!!

[@Finanzbull3]

Thank you very much for this awesome explaination! Now I´m able to understand everything about Black Scholes. Keep up the good work :)

[@Tweeteketje]

This is so clear, thank you!! ^^

[@maiinh6103]

Thank you so much, really helpful!

[@siddharthlal2291]

At timestamp 11:12, shouldn't it be sigma and not sigma squared?

[@Tweeteketje]

Yeah, I guess you're right!

[@FinAndEcon]

Well spotted, thank you. :)

[@ahadamin7361]

Great

[@jeszar2011]

7:32 . if dt=0 , should be Mu*dt, so firt term in 9:33 (mu- ...)dt -> 0 too.

[@FinAndEcon]

Good catch!