IJPAMR International Journal of Pure and Applied Mathematics Research 2789-9160 SvedbergOpen ijpamr-2-1-004 10.51483/IJPAMR.2.1.2022.49-64 Research Paper Theory of Pricing in Stochastic Financial Models - Continuous Tim AlafifHamdin 1 2 * 1Tabuk University, Tabuk 47512, Saudi Arabia. E-mail: hjumaa@ut.edu.sa 2Khartoum University. Khartoum. Sudan *Corresponding author: Hamdin Alafif, Tabuk 47512, Saudi Arabia. E-mail: hjumaa@ut.edu.sa 04 2022 2 1 49 64 Abstract

In this manuscript we formulate the basic postulate of the Heath-Jarrow-Merton approach and investigate the existence and uniqueness of the Heath-Jarrow-Merton model. We examine the general Heath-Jarrow-Merton set-up and the Gaussian Heath-Jarrow-Merton set-up respectively and also, we present some examples of the Heath-Jarrow-Merton model for the different types of the volatility structure.

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