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

Series, if abebe murepay a $100000interse free loan by making annuallypaym...

if abebe murepay a $100000interse free loan by making annuallypayment of 1st

How many miles to the gallon does marci''s car get, Marci filled her car's ...

Marci filled her car's gas tank on Monday, and the odometer read 32,461.3 miles. On Friday while the car's odometer read 32,659.7 miles and she filled the car's tank again. It will

find the ratio of their 11th terms, The  ratio of the sum of first n term...

The  ratio of the sum of first n terms of two AP's  is 7n+1:4n+27.  Find the ratio of their 11th  terms . Ans:    Let a 1 , a 2 ... and d 1 , d 2 be the I terms are Cd's of t

Comparison test or limit comparison test, Comparison Test or Limit Comparis...

Comparison Test or Limit Comparison Test In the preceding section we saw how to relate a series to an improper integral to find out the convergence of a series.  When the inte

Prove that seca+tana=2x, If secA= x+1/4x, prove that secA+tanA=2x or  1/2x....

If secA= x+1/4x, prove that secA+tanA=2x or  1/2x. Ans:    Sec? = x +  1/4x ⇒ Sec 2 ? =( x + 1/4x) 2                             (Sec 2 ?= 1 + Tan 2 ?) Tan 2 ? = ( x +

Evaluate algebraic word problems, Evaluate algebraic word problems: A ...

Evaluate algebraic word problems: A utility has three nuclear facilities which supply a total of 600 megawatts (Mw) of electricity to a particular area.  The largest facility

Minimax regret method -decision making under uncertainty, MINIMAX regret me...

MINIMAX regret method Minimax method assumes that the decision maker will experience 'regret' after he has made the decision and the events have happened. The decision maker ch

Prove that ac2 =ab2 + bc2+2bcxbd, If ABC is an obtuse angled triangle, obtu...

If ABC is an obtuse angled triangle, obtuse angled at B and if AD⊥CB Prove that AC 2 =AB 2 + BC 2 +2BCxBD Ans:    AC 2 = AD 2 + CD 2 = AD 2 + (BC + BD) 2 = A

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