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

Find out height of the box which will give maximum volume, We contain a pie...

We contain a piece of cardboard i.e. 14 inches by 10 inches & we're going to cut out the corners as illustrates below and fold up the sides to form a box, also illustrated below. F

How many cubic yards of concrete are required, A concrete retaining wall is...

A concrete retaining wall is 120 feet long with ends shaped as given. How many cubic yards of concrete are required to construct the wall? a. 217.8 yd 3 b. 5,880 yd 3

Logarithmic differentiation, Logarithmic Differentiation : There is one...

Logarithmic Differentiation : There is one final topic to discuss in this section. Taking derivatives of some complicated functions can be simplified by using logarithms.  It i

Taylor series - sequences and series, Taylor Series - Sequences and Series ...

Taylor Series - Sequences and Series In the preceding section we started looking at writing down a power series presentation of a function.  The difficulty with the approach

Find x if circle passes through -3, The centre of a circle is (2x - 1, 3x +...

The centre of a circle is (2x - 1, 3x + 1).Find x if the circle passes through (-3,-1) and the length of the diameter is 20 units.

How far did the ?rst arrow goes, From a fixed point directly in front of th...

From a fixed point directly in front of the center of a bull's eye, Kim aims two arrows at the bull's eye. The first arrow nicks one point on the edge of the bull's eye; the second

Show that the function f is one-one but not onto, Consider the function f: ...

Consider the function f: N → N, where N is the set of natural numbers, defined by f(n) = n 2 +n+1. Show that the function f is one-one but not onto. Ans: To prove that f is one

Obligatory application and interpretation problem, Obligatory application/i...

Obligatory application/interpretation problem : Next, we need to do our obligatory application/interpretation problem so we don't forget about them. Example : Assume that the

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