Chapter

Completeness and Hedging

Tomas Björk

in Arbitrage Theory in Continuous Time

Published in print September 1998 | ISBN: 9780198775188
Published online November 2003 | e-ISBN: 9780191595981 | DOI: http://dx.doi.org/10.1093/0198775180.003.0007
 Completeness and Hedging

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In this chapter, we discuss the possibility of replicating a given contingent claim. We prove that the Black‐Scholes model is complete.

Keywords: Black‐Scholes; completeness; contingent claims; hedging

Chapter.  4366 words. 

Subjects: Financial Markets

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