11.4 Markov processes (See pages 216-7 e In a markov process future movements in a variable depend only on where we are, not the history of how we got where we are o We assume that stock prices follow Markov processes Options, Futures, and Other Derivatives, 5th edition C 2002 by John C Hull11.4 Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull Markov Processes (See pages 216-7) • In a Markov process future movements in a variable depend only on where we are, not the history of how we got where we are • We assume that stock prices follow Markov processes