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What is the difference between probability & risk neutralprobability?

  1. Jun 25, 2013 #1

    woundedtiger4

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    Are both same or different? Can someone give me some example to understand?

    Thanks in advance
     
    woundedtiger4, Jun 25, 2013
  2. jcsd
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  3. Jun 25, 2013 #2

    MarneMath

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    Well, probability is a board overarching term, while risk neutral probability is specific measure that tends to occur when talking about a free arbitrage market.
     
    MarneMath, Jun 25, 2013
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