• Discrete probability: basic concepts and elementary models, conditional expectation, martingales
• The binomial asset pricing model

After completing this class the student will have the ability to:

• describe and apply the basic concepts of discrete probability
• describe and apply the binomial asset pricing model

• 3 written tests (each weights 25% of the final grade)

• homework assignments (25% of the final grade) , students will be asked to present their solutions in the class, presentation of the solutions is also counted towards the grade
  

• 1 optional extra test, replaces the one of the three previous test results with the fewest points

The written tests will be strongly related to the problems already discussed in class. Additional exercises can be solved for extra points.

Grading key:

1:  >= 85%

2:  >= 78%

3:  >= 60%

4:  >= 50%

5:  < 50%