Lognormal distribution, Mathematics

Assignment Help:

The Lognormal Distribution

If ln(X) is a normally distributed random variable, then X is said to be a lognormal variable.

If P1, P2, P3, ... are the prices of a scrip in periods 1, 2, 3, ..., some applications in finance require ln (P2/P1), ln (P3/P2),... to be normally distributed, that is, continuously compounded returns are required to be normal. This property is described as “Stock Prices are Lognormal”.

REMARK

The previous random variables arose out of natural experiments. The following distributions are derived distributions. That is, it is a function of other distributions. We require the following two distributions in Testing of Hypothesis. and our presentation will be restricted by our requirements. 


Related Discussions:- Lognormal distribution

Evaluate of the largest angle, The measures of the angles of a triangle are...

The measures of the angles of a triangle are in the ratio of 3:4:5. Evaluate of the largest angle. a. 75° b. 37.5° c. 45° d. 60° a. The addition of the measures of t

Find the average, The center of a national park is located at (0,0). A spec...

The center of a national park is located at (0,0). A special nature preserve is bounded by by straight lines connecting the points A at (3,2), B at (5,1), C at (8,4) and D at (6,5)

Least common multiple (lcm), Before we look at this, let us learn wha...

Before we look at this, let us learn what a multiple is. Take any number say 3. Multiply this number with natural numbers. We obtain 3, 6, 9, 12, 15, 18,.........

Describe vibration absorber and white noise, Describe what is meant by eac...

Describe what is meant by each of the following NVH terms and explain their importance in vehicle refinement: (a)  Vibration absorber (b)  Fast Fourier Transform (c)  Whit

Explain the dependent events, Explain the Dependent Events? Events are ...

Explain the Dependent Events? Events are called dependent events when the outcome of one event influences the outcome of the second event. P(A and B) = P(A) P(B following A

Simplification, 4.4238/[1.047+{1.111*[9.261/7.777]}*1.01

4.4238/[1.047+{1.111*[9.261/7.777]}*1.01

Difererntial equation, Ask queFind the normalized differential equation whi...

Ask queFind the normalized differential equation which has {x, xex} as its fundamental setstion #Minimum 100 words accepted#

Find the sum of a+b and a-b, Find the sum of a+b, a-b, a-3b, ...... to 22 t...

Find the sum of a+b, a-b, a-3b, ...... to 22 terms. Ans:    a + b, a - b, a - 3b, up to 22 terms d= a - b - a - b = 2b S22 =22/2 [2(a+b)+21(-2b)] 11[2a + 2b - 42b] =

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd