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How Do You Deal With Information Asymmetry?
A base theorem is a probablistic approach to up dating probabilities based on new information. Riht, it's totally fine if somebody says they think that the stock price is greater than a hundred, knowing nothing else,. But i do know that it can't both be above a hundred and be below 97. In the same way, when we're looking at option pricing, one of the big determinants of the fair value of an option is options derive their value because the future stock price is not going to be the same as what it is to day.