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

Simplify compound fractions, A compound fraction is a fraction that has oth...

A compound fraction is a fraction that has other fractions inside its numerator or denominator. Here's an example: While compound fractions can look really hairy, they're r

Rate of change interpretation of derivative, Rate of Change : The first in...

Rate of Change : The first interpretation of derivative is rate of change.  It was not the primary problem which we looked at in the limit chapter, however it is the most signific

Commercial, The C.P. of 20 articles is same as theS.P. of x articles.Articl...

The C.P. of 20 articles is same as theS.P. of x articles.Article profit is 25%.Find x

Application of interpolation and extrapolation, Application Interpolati...

Application Interpolation and extrapolation are widely used by businessmen, administrators, sociologists, economists and financial analysts. While interpolation hel

Definition of limit, Definition of limit : Consider that the limit of f(x)...

Definition of limit : Consider that the limit of f(x) is L as x approaches a & write this as provided we can make f(x) as close to L as we desire for all x adequately clos

Permission for xii class, Is there any class in expertsmind for second year...

Is there any class in expertsmind for second year english.?

Discret math, i have a question about discret math

i have a question about discret math

Standard interpretations to derivatives, Standard interpretations to deriva...

Standard interpretations to derivatives Example   Assume that the amount of money in a bank account is specified by                                       P (t ) = 500 + 10

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