20.8 Stochastic Volatility Models (page 458) S (r-q)dt+vdrs dv=a(vi-v)dt+er dzy When v and s are uncorrelated a European option price is the Black Scholes price integrated over the distribution of the average variance Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 20.8 Stochastic Volatility Models (page 458) • When V and S are uncorrelated a European option price is the Black￾Scholes price integrated over the distribution of the average variance L V S dV a V V dt V dz r q dt V dz S dS a = − +  = − + ( ) ( )