Exam on financial mathematics.

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Yesterday, I had an exam on financial mathematics. It is a new subject in my department. This course was started to teach just from the previous year. So student have to face some problems when they study about his. But it is very important subject now because it deals with

1. Different types of markets, contracts, options and traders. In this sector, we have to study about options to a large context. Basically we have to research on European and American call and put options, option bounds and its chaange with respect to maturity or expiry date, call, put, cash etc.

1. Stochastic models are very important in financial sector, basically on stock price. Here we have to study about stochastic process, Brownian motion (Weiner process), means, variance, parameters, Ito's lemma, lognormal properties of stock prices.

1. Hedging strategies and managing market risk using derivatives is another key topics in financial mathematics. We have study about different types of trading strategies such as: straddle, bull spread, bond, risk-free interest rate, no arbitrage principle beside options and their payoff.

1. Binomial distribution is very important issue in almost all sectors of science and life. In financial mathematics, there are big use of binomial distribution. Binomial option pricing model, risk neutral valuation, pricing of contingent claims have great importance.

1. Black- Scholes analysis is also important that's why we have to study about it also. There are also some important topics that we have to study.

Anyway, I did well in that examination but my expectation was more than that. But I am happy after all. Thanks for visiting me. Stay tuned.