CIRJE-J-84. Kunitomo, Naoto and Akihiko Takahashi, "On Recent Developments in Mathematical Finance", November 2002.

We review some recent developments in mathematical finance and financial econometrics. In particular we discuss the asymptotic expansion approach recently proposed by Kunitomo and Takahashi (1995, 2001, 2002). Its mathematical validity is closely related to the Watanabe=Yoshida theory on Malliavin Calculus in Stochastic Analysis.