What is the difference between probability & risk neutralprobability?

Level: High School
Thread starter woundedtiger4
Start date Jun 25, 2013
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woundedtiger4

Thread starter
Jun 25, 2013

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

Thanks in advance

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MarneMath

Education Advisor

Jun 25, 2013

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.

What is the difference between probability & risk neutralprobability?

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