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

Determine the conditional probability, Consider a class of 55 students. The...

Consider a class of 55 students. The student names are placed in a hat and 3 names are randomly drawn without replacement. a) If the first person drawn was named the class presi

About algebra, how do i compute an algebra number

how do i compute an algebra number

Tests for an ideal index number, Tests for an Ideal Index Number 1. F...

Tests for an Ideal Index Number 1. Factor Reversal Test Factor Reversal Test indicates that when the price index is multiplied along with a quantity index that is factors

What is the larger dimension in inches of the frame, Jessica has a picture ...

Jessica has a picture in a frame with a total area of 288 in2. The dimension of the picture without the frame is 12 in through 14 in. What is the larger dimension, in inches, of th

Four-step plan, Adison earned $25 mowing her neighbor''s lawn. Then she loa...

Adison earned $25 mowing her neighbor''s lawn. Then she loaned her friend $18, and got $50 from her grandmother for her birthday. She now has $86. How much money did Adison have to

Rate and ratio, express 4:24 as fraction in lowest term

express 4:24 as fraction in lowest term

Find the area of shaded region of circle of radius, Find the area of shaded...

Find the area of shaded region of circle of radius =7cm, if ∠AOB=70 o , ∠COD=50 o and ∠EOF=60 o . (Ans:77cm 2 ) Ans:    Ar( Sector AOB + Sector COD + Sector OEF) =  7

Ryan gym membership costs him how much is every installment, Ryan's gym mem...

Ryan's gym membership costs him $390 per year. He pays this within twelve equal installments a year. How much is every installment? To ?nd out each installment, the total yearl

Mechanical vibrations, While we first looked at mechanical vibrations we lo...

While we first looked at mechanical vibrations we looked at a particular mass hanging on a spring with the possibility of both a damper or/and external force acting upon the mass.

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