Explain lognormal stochastic differential equation
Explain lognormal stochastic differential equation for evolution of an asset.
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One of the beginning points for typical derivatives theory is the lognormal stochastic differential equation for evolution of a certain asset. Itoˆ’s lemma defines the stochastic differential equation for value of an option on such asset. In mathematical terms, when we have a Wiener process X along with increments dX which are normally distributed along with mean zero and variance dt, in that case the increment of a function F(X) is specified by
dF = (dF/dX) dX + ½ (d2F/dX2) dt
It is a very loose dentition of Itˆ o’s lemma but it will suffice.
Explain a rigorous theory for Brownian motion developed by Wiener Norbert.
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A public key for RSA is published as n = 17947 and a = 3. (i) Use Fermat’s method to factor n. (ii) Check that this defines a valid system and find the private key X. Discover Q & A Leading Solution Library Avail More Than 1425089 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1960291 Asked 3,689 Active Tutors 1425089 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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