Does Change of Numeraire same as Change of Measure?
It is a bit confusing since both looks same. Do they have same meaning, or just mathematically alike.
2026-04-02 18:42:37.1775155357
Does Change of Numeraire same as Change of Measure?
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Those are two different things, in the following sense:
Change of measure is a mathematical operation, useful in various ways and situations.
Change of numéraire has an economic rationale; instead of using one numéraire, you use another one. To make things look nicer you can change your measure at this point (mainly because under the new measure the discounted process (discounted according to the new numeraire) is a martingale, but this is not necessary)
This is like: "What's the difference between adding two numbers and taking the average of $n$ numbers"?
Taking the average is an operation that uses addition, but those are pretty disconnected.