Explain lognormal stochastic differential equation
Explain lognormal stochastic differential equation for evolution of an asset.
Expert
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.
XYZ Company collects 20% of a month's sales in the month of sale, 70% in the month following sale, and 5% in the second month following sale. The remainder is not collectible. Budgeted sales for the subsequent four months are:
The basic Fermat algorithm is as follows: Assume that n is an odd positive integer. Set c = [√n] (`ceiling of √n '). Then we consider in turn the numbers c2 - n; (c+1)2 - n; (c+2)2 - n..... until a perfect square is found. If th
Explain a rigorous theory for Brownian motion developed by Wiener Norbert.
1. Smith keeps track of poor work. Often on afternoon it is 5%. If he checks 300 of 7500 instruments what is probability he will find less than 20substandard? 2. Realtors estimate that 23% of homes purchased in 2004 were considered investment properties. If a sample of 800 homes sold in 2
II. Prove that Set Theory is a Model of a Boolean Algebra The three Boolean operations of Set Theory are the three set operations of union (U), intersection (upside down U), and complement ~. Addition is set
Explain trading of call options.
Explain Black–Scholes model.
For every value of real GDP, actual investment equals
Using the mass balance law approach, write down a set of word equations to model the transport of lead concentration. A) Draw a compartmental model to represent the diffusion of lead through the lungs and the bloodstream.
It's a problem set, they are attached. it's related to Sider's book which is "Logic to philosophy" I attached the book too. I need it on feb22 but feb23 still work
18,76,764
1934918 Asked
3,689
Active Tutors
1434819
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!