or graduate/advanced undergraduate programs in finance, financial engineering, financial econometrics, or financial information science. The no- arbitrage asset pricing theory is based on the simple and well ac­ cepted principle that financial asset prices are instantly adjusted at each mo­ ment in time in order not to allow an arbitrage opportunity. Here an arbitrage opportunity is an opportunity to have a portfolio of value aat an initial time lead to a positive terminal value with probability 1 (equivalently, at no risk), with money neither added nor subtracted from the portfolio in rebalancing dur­ ing the investment period. It is necessary for a portfolio of valueato include a short-sell position as well as a long-buy position of some assets.