Lecture
This lecture covers the Black-Scholes-Merton model for pricing derivatives, wealth dynamics, replication strategies, valuation partial differential equations, risk-neutral measures, the BSM formula, put-call parity, the Greeks (Delta, Gamma, Theta, Vega), market conventions, and dynamic hedging. It also discusses the relationship between the value of a portfolio and its greeks, hedging errors, engineering exposure, and (0, A)-hedging.