21.1 ONE DIFFICULTY WITH RISK NEUTRAL PRICING21.2 CHANGE OF NUMERAIRE AND THE FORWARD RISK NEUTRAL DYNAMICS21.3 THE OPTION PRICING FORMULA IN “NORMAL” MODELS21.4 THE LIBOR MARKET MODEL21.5 FORWARD RISK NEUTRAL PRICING AND THE BLACK FORMULA FOR SWAPTIONS21.6 THE HEATH, JARROW, AND MORTON FRAMEWORK21.7 UNNATURAL LAG AND CONVEXITY ADJUSTMENT21.8 SUMMARY21.9 EXERCISES21.10 APPENDIX: DERIVATIONS