Finance and Derivatives: Theory and Practice Finance and Derivatives: Theory and Practice Sébastien Bossu and Philippe Henrotte Let D t be the value of the derivative at time t and S t that of the underlying asset. There exists a function f of time and S such that: D t = f(t, S t ) 2 Sébastien Bossu & Philippe Henrotte, Finance and Derivatives: Theory and Practice. Copyright © Dunod, Paris, 2002. English translation published by John Wiley & Sons Ltd, 2006. Chapter 4 Derivatives