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

Unitary methods, john walked to school at an average speed of 3 miles/hr a...

john walked to school at an average speed of 3 miles/hr and jogged back along the same route at 5miles/hr. if his total time was 1 hour, what was the total number of miles in the

Solve simultaneous equations by graphical method, Solve the following pairs...

Solve the following pairs of simultaneous equations by elimination method i.2x+y=10 ii. 3x+y=6 3x-2y=1 5x+y=8 solve the following simult

Solve the subsequent lp problem, Solve the subsequent LP problem graphicall...

Solve the subsequent LP problem graphically through enumerating the corner points. MAX:              3X1 + 4X2 Subject to:    X1   12                     X2    10

Melissa is four times if jim is y years old, Melissa is four times as old a...

Melissa is four times as old as Jim. Pat is 5 years older than Melissa. If Jim is y years old, how old is Pat? Start along with Jim's age, y, because he appears to be the young

Product, a product can be anything including physical good,services,places,...

a product can be anything including physical good,services,places,experience,nations,organizations,properties,information.discuss the statement?

Build a fine automaton which accept all words, Build a Fine Automaton which...

Build a Fine Automaton which accept all words which have different first and last letters (that is if the word starts with an "a" to be accepted it should end with "b" and vice ver

Write down two more reasons why division is difficult, Write down two more ...

Write down two more reasons why children consider 'division' difficult. Regarding the first reason given above, one of fie few division related experiences that the child perhaps d

Example of problems related to applying operations, I had just come back fr...

I had just come back from a very interesting talk arranged by a Mathematics Centre, it was aimed at parents of primary school-going children. They had talked about, and demonstrate

Direction fields, This topic is specified its own section for a couple of p...

This topic is specified its own section for a couple of purposes. Firstly, understanding direction fields and what they tell us regarding a differential equation as well as its sol

Determine that the series is convergent or divergent, Determine or find out...

Determine or find out if the subsequent series is convergent or divergent.  If it converges find out its value. Solution To find out if the series is convergent we fir

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