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The risk-neutral pricing formula for a derivative with terminal payoff $V_N$ at time $N$ is $V_n = \mathbb{E}_n\left[\frac{V_N}{(1+r)^{N-n}}\right]$. This means the price at time $n$ is the conditional expectation of the discounted terminal payoff.

Conditions: Used in the risk-neutral pricing setting.; Discounting uses the factor $(1+r)^{N-n}$.; $V_N$ is the payoff at time $N$, and $V_n$ is the price at time $n$.

The risk-neutral pricing formula for a derivative with terminal payoff $V_N$ at time $N$ is $V_n = \mathbb{E}_n\left[\frac{V_N}{(1+r)^{N-n}}\right]$. This means the price at time $n$ is the conditional expectation of the discounted terminal payoff.

Conditions: Used in the risk-neutral pricing setting.; Discounting uses the factor $(1+r)^{N-n}$.; $V_N$ is the payoff at time $N$, and $V_n$ is the price at time $n$.