18.21 Sampling stock Price Movements (Equations 18.13 and 18.14, page 411) In a risk neutral world the process for a stock price Is ds= uis dt +os dz We can simulate a path by choosing time steps of length St and using the discrete version of this δS=S8t+SE√δt where a is a random sample from (0, 1) Options, Futures, and Other Derivatives, 5th edition C 2002 by John C Hull18.21 Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull Sampling Stock Price Movements (Equations 18.13 and 18.14, page 411) • In a risk neutral world the process for a stock price is • We can simulate a path by choosing time steps of length dt and using the discrete version of this where e is a random sample from f(0,1) dS =  ˆS dt + sS e dt dS =  S dt +sS dz