This paper describes and analyses the history of the fundamental equation of modern financial economics: the Black-Scholes (or Black-Scholes-Merton) option pricing equation. In that history, several themes of potentially general importance are revealed. First, the key mathematical work was not rule-following but bricolage, creative tinkering. Second, it was, however, bricolage guided by the goa...

This paper reviews methods for hedging and valuation of insurance claims with an inherent financial risk, with special emphasis on quadratic hedging approaches and indifference pricing principles and their applications in insurance. It thus addresses aspects of the interplay between finance and insurance, an area which has gained considerable attention during the past years, in practice as well...

Rainbow option refers to the whose payoff depends on at least two underlying risky assets, which is justifiably one of most significant tool hedge risk brought by uncertainty from financial market. Hence, pricing problem always an issue with great attention. In this paper, we assume that multiple dynamic stock prices obey uncertain differential equations without sharing dividends in framework t...

ii DEDICATION I would like to dedicate this thesis to my parents Fanti Meng and Ying Liu without whose support I would not have been able to complete this work.

We present an introduction to mathematical Finance Theory, covering the basic issues as well as some selected special topics.

volume indicates. Index options give market participants the ability to participate in anticipated market movements without having to buy or sell a large number of securities, and they permit portfolio managers to limit downside risk. Given their prominence and functions, the pricing efficiency of these markets is of great importance to academics, practitioners , and regulators. Well-functionin...

futures contract is one of the most important derivatives that is used in financial markets in all over the world to buy or sell an asset or commodity in the future. pricing of this tool depends on expected price of asset or commodity at the maturity date. according to this, theoretical futures pricing models try to find this expected price in order to use in the futures contract. so in this ar...