Question: Bonus Problem 2 As for the option pricing, in Lecture 6-8 we have discussed the binomial lattice framework, while in Lecture 10 the analytical formulas

Bonus Problem 2 As for the option pricing, in Lecture 6-8

Bonus Problem 2 As for the option pricing, in Lecture 6-8 we have discussed the binomial lattice framework, while in Lecture 10 the analytical formulas called Black-Scholes option pricing formulas have been derived The third approach for the option pricing is the Monte Carlo method. Describe how to use the Monte Carlo simulation technique in the option pricing context with some numerical computation examples

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