Girsanov theorem (change of measure)

Layer 0 — Mathematicsin the Stochastic Processes subtree

Girsanov 1960 / Cameron-Martin 1944: under change of probability-measure via Radon-Nikodym derivative exp(-int theta dW - 0.5 int theta^2 dt), Brownian motion becomes BM with drift theta; foundation of risk-neutral pricing.

Related concepts

Explore Girsanov theorem (change of measure) on the interactive knowledge graph →