Abstract
In this chapter, we briefly review some basic probability theory which we shall need later. This includes the background material for defining stochastic processes in the next chapter. In particular, we focus on multivariate normal distributions and conditional expectations, since most models for financial asset prices used in derivative pricing are conditionally heteroscedastic normal models. Familiarity with these two subjects is required for the remaining of the book.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2003 Springer Science+Business Media New York
About this chapter
Cite this chapter
Kariya, T., Liu, R.Y. (2003). Basic Probability Theory. In: Asset Pricing. Springer, Boston, MA. https://doi.org/10.1007/978-1-4419-9230-7_3
Download citation
DOI: https://doi.org/10.1007/978-1-4419-9230-7_3
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-4849-8
Online ISBN: 978-1-4419-9230-7
eBook Packages: Springer Book Archive