An introduction to derivative pricing

Which is which ?

As it happens,

- The left-hand graph is the UK FTA index from 1963-92
- The right-hand graph is exponential Brownian motion with volatility of 17.8% and annual drift of 8.7%

Well done if you can tell the difference. But in any case, to find out why this similarity helps price derivatives, you can buy the book.

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