Today I revisited Section 2.5 ¡­

Today I revisited Section 2.5 (which is a difficult part of the book) by illustrating through several examples the "risk-neutral probability" approach for solving portfolio optimization problems with constraints (like no borrowing of money in the bank, no short-selling of stocks, etc).

Exercises (for Thursday): 2.8, 2.9, 2.10, 2.11.