Black-Scholes model shares common intuitions with risk-neutral option pricing model (also known as the binomial option pricing model). One of the biggest underlying assumptions of risk-neutral (binomial) model is that we live in a risk-neutral world. In a risk-neutral world, all investors only demand a risk-free return on all assets. Although the risk-neutral assumption is counterfactual, it is brilliant and desirable because the risk-neutral assumption doesn’t affect the prices of an option. In another words, prices of an option are exactly the same with or without the risk-neutral assumption. Explain why that is the case, and how risk-neutral assumption greatly simplifies the calculations of risk-neutral option pricing approach. 

Write 4 page essay on the topic Meno’s Paradox.

This evidenced in the argument between Meno and Socrates, whereby, they both agree on prior knowledge. Meno can be referred to as Socratic dialogue written by Plato. It aims to find the definition of arête or virtue. In this regard, it means virtue in general manner rather than particular virtues such as temperance and justice. In response to Meno’s paradox, Socrates comes up with new ideas of immortality of the soul, the theory on knowledge as a recollection, which Socrates illustrates by posing a mathematical puzzle to one of Meno’s slaves. In this paradox, Socrates tries to find a distinction between true belief and knowledge. In this dialogue, Meno suggests that inquiry is not possible. The argument that meno brings forth is known as meno’s paradox. As a solution to this disturbing paradox, Socrates constructs a theory of recollection (Meno 71).

Meno asks Socrates whether virtue can be taught. In response, Socrates says that he does not know anything like virtue and in his entire life. he has never known anyone who is virtuous. In their argument, Meno tries to define virtue as power of command with exceptions in that there are virtues for those who command and those who obey and that the power of command must be exercised either justly or unjustly. On his part, Meno is willing to accept that virtue exist and can be taught. On his side, Socrates had no difficulty of admitting that there is virtue of good, and that the goods whether of mind or body are under direction of knowledge. Basing on this assumption, it can be deduced that virtue is teachable.

In this paradox, there are two notions involved in that it is possible to overcome Meno’s paradox without difficulty and on the other hand, Socrates theory of recollection which is used as a response to the paradox but as the solution. The Meno’s paradox states that a man cannot inquire either about what he or she does not know or what