Ses 12: Options III & Risk and Return I

MIT 15.401 Finance Theory I, Fall 2008
View the complete course: ocw.mit.edu/15-401F08
Instructor: Andrew Lo
License: Creative Commons BY-NC-SA
More information at ocw.mit.edu/terms
More courses at ocw.mit.edu

[@Zantetsukens]

"Risk and Return I" starts at 53:13.

[@colbyiam]

MrQiyong You save my time A LOT sir!

[@user-tm8wy1hx7n]

MrQiyong thanks :)

[@Zantetsukens]

you're most welcomed guys. Good luck to all your studies!!

[@dr.abhinandankulal4660]

Thank you

[@soontrevor]

Wow thanks. 53mim saved.

[@rohitkumar_rock]

He is out of the world. He has got this great in-depth knowledge of the subject and its always feel good listen to his lectures.

[@sudhirpatil3434]

Prof has- humour, knowledge and art of "making complex stuff simple".... as i watch n listen to him with utmost care n attention, i feel that he is very much interested in teaching n perhaps derives a feeling of great satisfaction from it!!! let me thank MIT- who uploaded the series, you tube- who gave me chance to watch it and more so Prof Andrew Lo!

[@0-To-100]

Absolutely the best finance lecturer i have ever listened to!

[@sammyo1975]

I agree

[@tobiasweimann1534]

One of the best lectures about options I have seen so far. Thanks

[@prasadsathe5358]

Fantastic Lecturer. They way he has explained Option Pricing is simply Great.

[@anudeep_tondothi]

I have great respect for Andrew

[@kushalsaitia971]

this lecture is THE bomb.

[@namphe]

I love Andrew !

[@Regalert]

Love this guy.

[@kaleemsaleem7821]

Really a brilliant teacher...

[@gkalpas]

Very interesting lectures (all of them) . Thank you for your free offer! I 'm a graduate student and by understanding those expert things i'm falling in love with finance

[@ccaioc]

Honestly, this is fantastic. What a great lecturer.

[@brainstormingsharing1309]

Absolutely well done and definitely keep it up!!! 👍👍👍👍👍

[@weebgrinder]

I got lost a lecture ago but keep watching lol

[@switzerland]

Same here, it's worth it even if only understand 10%.

[@BB1CC666]

wow, mind blown

[@vasudilwal9356]

Here to learn everything about options to cover my loses. Watch out wall street

[@mohamuudahmed4898]

thanks alot Teacher

[@ChaplainDaveSparks]

It looks like something I attempted to solve with a *_Monte Carlo simulation._*

[@kritikashanker3115]

I am curious, do we have someone from that class here in the comments? It must be so cool watching that now.😀😀

[@zhanglei3amm]

such good lectures, i wonder why there are only few views. I am following from ses 1.

[@pedalesmexicali]

Me too. I just finished section 12 with 8 more to go. The Argentinian girl always has to ask multiple questions per class.

[@martinspage]

Very interesting... If $p=0$, and $d < 1$, this model says that the price of an option to buy a share of a stock (i.e. $C_0$), with the stock's price being guaranteed to go down, can still be positive. I'm not sure what sense that makes... If $p=0$, $d

[@MrBTie]

22:00 Isn't it just that u and d simply reflect the probability of the stock going up or down, therefore p is 'over-determined'?

[@michaellorke1980]

in the Black Scholes continuous generalization, sigma should be sth like "u-d", right?

[@aribadabing]

What does it mean if B* is negative?

[@christinedarrel]

Kinda difficult topic for me!!!

[@patrickblair2818]

Does anyone have the syllabus for this class?

[@mitocw]

ocw.mit.edu/courses/sloan-school-of-management/15-401-finance-theory-i-fall-2008/syllabus/

[@MithunKannan23]

u > r > d, was fucking genius.

[@naziaparveen6398]

CAniml

[@arrowb3408]

Drop this text in COVID stay home isolation. Man, the section I would say is the utterly toughest to swallow and to digest among all other secs. A 20 yo kid had a sip on this product with multiple ops and finished his own life without understanding. This is exactly the same as A.L ever emphasized at the beginning- have a chainsaw to a kid. Now I totally understand it.....STF....

[@jeetdave2336]

where can we watch 15.437 ?

[@mitocw]

MIT OpenCourseWare has not recorded 15.437 as of this reply (May 16, 2023). Visit ocw.mit.edu to see what do have for courses. You can filter the results for videos. Best wishes on your studies!

[@rohank2825]

@@mitocw Please record it 🙏

[@marcuszamani4075]

I come to these videos 13 years after the video. I like it a lot, and am learning, but now I'm curious about the class he was speaking to in this moment of recording? Who are his students and how are they doing financially these days??? Had I been in his class in 2008, god, I'd be like a billionaire now... I probably would've learned about Bitcoin and Blockchain, and been like "hmm let me drop some capital in this..."

[@marcuszamani4075]

maybe the person who presented Bitcoin via Whitepaper was him or one of his students, lol!

[@nicolasrodrigo9]

I don't think those students nor the professor are the kind of people who buys Bitcoin. As he said in one of the first lessons, it is non-sense to buy something that doesn't give you cashflows, otherwise it's not an asset. Bitcoin hasn't even been tested in a recession environment, I think we'll see in the next months / years how crypto in general will perform and if it's really a safe heaven for investors, as enthusiasts claim it is.

[@hl3641]

14 yrs late……..

[@hl3641]

The view counts suggest the makers is pushed up by brainless meme crowd… lol

[@investor.z]

OMG, when that guy thought Cu and Cd were market prices. AHAHAHA. What a bafoon! I totally understand all of this.