DYNAMICS-FREE PRICING

The following sections are included:

• Bond Prices and Interest Rates

  • ‘Spot’ Bond Prices and Rates

  • Forward Bond Prices and Rates

  • Uncertainty in Future Bond Prices and Rates

• Forwards and Futures

  • Forward Prices and Values of Forward Contracts

  • Determining Futures Prices

  • Illustrations and Caveats

  • A Preview of Martingale Pricing

• Options

  • Payoff Distributions for European Options

  • Put-Call Parity

  • Bounds on Option Prices

  • How Prices Vary with T, X, and S_t