monte carlo methods in financial engineering stoch
Andrew Denesik-Considine IV
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Dynamics At the heart of Monte Carlo methods in finance lies the modeling of asset prices through stochastic processes, most notably: Geometric Brownian Motion (GBM): Used in the Black-Scholes model, where the asset price \( S_t \) evolves as: \[ dS_t = \mu S_t dt + \sigma S_t dW_t \]
