We develop a new approach to pricing and hedging contingent claims in incomplete markets. Mimicking as closely as … possible in an incomplete markets framework the no--arbitrage arguments that have been developed in complete markets leads us … to defining the concept of pseudo--arbitrage. Building on this concept we are able to extend the no--arbitrage idea to a …

minimal hedging portfolios for a number of reward processes of the ``classical'', lookback and Asian type. These results …

means that for every contingent claim there exists a hedging strategy minimizing the expected square of net loss. …

The paper developes a general arbitrage free model for the term structure of interest rates. The principal model is … support is derived for the spot rate return. The model permits the arbitrage free valuation of bond options and interest rate …

provide a unified and easily applicable approach to pricing and hedging Black-Scholes type options on stocks, bonds, forwards …. futures and exchange rates. We also cover the pricing and hedging of options to exchange two Black-Scholes type options for …We deal with the valuration and hedging of non path-dependent European options on one or several underlyings in a model …

induced by hedging strategies. This leads to a stochastic volatility endogenously determined by agents' trading behaviour … distortions can be induced by feedback effects from hedging strategies. …