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Financial Mathematics Ito’s lemma

Ito's Lemma is a fundamental theorem in stochastic calculus with significant implications in financial mathematics. It provides a method for determining the differential of a function of a stochastic process, crucial for pricing derivatives and assessing risk. This guide delves into the mathematical formulation of Ito's Lemma, its applications in option pricing models, and its importance in the Black-Scholes framework. Whether you're a student or a finance professional, grasping this theorem is essential for navigating modern financial markets.

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Financial Mathematics Ito’s lemma

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  1. Financial Mathematics Ito’s lemma

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