  The change of numeraire gives very important computational simplification in
option pricing. This technique reduces the number of sources of risks that need
to be accounted for and so it is useful in pricing complicated derivatives that
have several sources of risks. In this article, we considered the underlying
mathematical theory of numeraire technique in the viewpoint of PED theory and
illustrated it with five concrete pricing problems. In the viewpoint of PED
theory, the numeraire technique is a method of reducing the dimension of status
spaces where PDE is defined.
