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

Decision-making under conditions of uncertainty, Decision-Making Under Cond...

Decision-Making Under Conditions of Uncertainty With decision making under uncertainty, the decision maker is aware of different possible states of nature, but has insufficient

Simple interest, find the simple interest on Rs. 68,000 at 50/3 per annum f...

find the simple interest on Rs. 68,000 at 50/3 per annum for 9 month

Prisms, i have to find surface,lateral,and volume

i have to find surface,lateral,and volume

How far off shore is the sinking ship, A sinking ship signals to the shore ...

A sinking ship signals to the shore for assistance. Three individuals spot the signal from shore. The ?rst individual is directly perpendicular to the sinking ship and 20 meters in

Trigonometry, In the riangle ABC the AB=12 cm,AC=28 cm and angle ABC=120 de...

In the riangle ABC the AB=12 cm,AC=28 cm and angle ABC=120 degrees.BC=?

Marketing, What are the Input and Output of Marketing

What are the Input and Output of Marketing

Estimate the loss to the bank - restructure the loan, Your bank has a loan ...

Your bank has a loan outstanding with a current balance of $1,000,000 that is payable in quarterly equal instalments of $49,924.  This loan has another 6 years to maturity.  The bo

Algorithm, what does algorithm refer to

what does algorithm refer to

Find where the breakdown occurred and his original speed, A cyclist, after ...

A cyclist, after riding a certain distance, stopped for half an hour to repair his bicycle, after which he completes the whole journey of 30km at half speed in 5 hours.  If the bre

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