Ito's Lemma

mercredi 4 mars 2015

We are given

X(t) = X(0) e^[(α-.5σ^2)t + σZ(t) ]



why do they say that

dX/dt = (α-.5σ^2) X(t)



where does the X(t) come from?



(this is Example 18B in ASM Manual)





Ito's Lemma

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