11.3 Modeling Stock Prices We can use any of the four types of stochastic processes to model stock prices The continuous time, continuous variable process proves to be the most useful for the purposes of valuing derivatives Options, Futures, and Other Derivatives, 5th edition C 2002 by John C Hull11.3 Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull Modeling Stock Prices • We can use any of the four types of stochastic processes to model stock prices • The continuous time, continuous variable process proves to be the most useful for the purposes of valuing derivatives