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451 Appendix E Synthetic and Arbitrage Relationships 453 Appendix F Rmended Reading 457 Index 463 Table of Contents Foreex Introduction 1 II Some Mathematical Preliminaries 5 III Ito Integrals 18 IV Ito Processes and the Ito Formula 40 V Stochastic Differential Equations 59 VI The Filtering Problem 75 VII Diffusions: Basic Properties 103 VIII Other Topics in Diffusion Theory 124 IX Applications to Boundary Value Problems 160 X Application to Optimal Stopping 183 XI Application to Stochastic Control 212 Appendix A: Normal Random Variables 236 Appendix B: Conditional Expectations 239 Appendix C: Igrok method forex Integrability and Martingale Convergence 241 Solutions and additional hints to some of the exercises 244 Bibliography 252 List of Frequently Used Notation and Symbols 261 Index 265 Table of Contents Preface xv Software xxii 1 Theory of Arbitrage 1 1.

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