Chapter 249 (1/2)

In the afternoon, the woods.

Cheng Nuo is on time after class.

On a stone table for rest in the woods, Wang Ji had been waiting here.

Seeing Cheng Nuo coming, Wang Ji waved to him, ”this way, this way.”

Cheng Nuo comes to the stone table and sits opposite Wang Ji.

The grove is a remote part of the campus. Apart from the occasional couple who are reluctant to spend money to stay in hotels, few people come here.

The wind rattled the leaves.

In the quiet woods, on the stone table, Cheng Nuo and Wang Ji sit opposite each other.

”We Let's go. ” Wang Ji takes a look at Cheng Nuo, takes off his coat and opens his mouth slowly.

Cheng Nuo nodded gently and took a deep breath, ”well, schoolmaster, come on!”

Wang Ji took out a stack of A4 paper from his schoolbag.

That's his pre printed paper. Seven pages in all.

He handed the printed paper to Cheng Nuo and looked at Cheng Nuo eagerly. ”Now, can you tell me which step of my paper is wrong?”

He didn't sleep well all night yesterday because he had been thinking about it.

This afternoon, he had just finished his lunch when he came to the woods and waited for Cheng Nuo early.

Even if you die, you have to die to understand.

Wang Ji didn't know if he could save his paper. But at least, he needs to know where he went wrong.

Cheng Nuo took the paper with a smile and shrugged, ”of course.”

Cheng Nuo took out a pen from his pocket, turned to the second page of the paper, and drew a horizontal line under a formula. ”Well, that's the step. Schoolmaster, how did you get this formula from the previous formulas? ”

Cheng Nuo's formula is one of the first several derived formulas of Wang Ji's new solution.

In this paper, Wang Jiji wrote that the pseudo homogeneous differential equation of a Black Scholes stochastic differential equation, for example: D = (? 1) (UDT + σ db1)

write out the pseudo homogeneous differential equation of this stochastic differential equation, d = (σ) dB, so

Then let an equation f (x) = C (T) e ^ σ b * t. The maximum and minimum values of the first order derivative are substituted into the pseudo homogeneous differential equation of the original equation, and then the Riemann integral is used to solve the equation. Finally, the Ito formula is used to solve the differential equation.

The key is the process of substituting the maximum value of the first-order derivative of F (x) into it.

”What's the matter? What's wrong with this step?” Wang Ji looks confused.

He thought Cheng Nuo would say that the mistake he made was in the middle and later part of this paper.

After all, the formula calculation steps in the later part of the paper are too many and too complex.

Wang Jian can not be 100% sure that he will make mistakes in some places.

Can Cheng Nuo, the place that points out to oneself, but in the paper the first few formulas.

Seeing that Wang Ji's brain hasn't turned around, Cheng Nuo frowned slightly and explained patiently, ”schoolmaster, you have set a f (x) = C (T) e ^ σ b * t here, and then substitute the maximum and minimum values of its first derivative into it.”

”But how can you be sure that the f (x), its first reciprocal, must have a maximum or a minimum?”

”+ ∞ and - ∞ are both possible!”

”When the maximum value of the first derivative is positive infinity, or the minimum value is negative infinity, the latter formula is impossible to hold.”

Cheng Nuo finished his judgment word by word.

Cheng Nuo opposite, after listening to Cheng Nuo's words, Wang Ji's face has turned pale.