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

.probability, a box contains 4 white and 6 green balls.Two balls are drawn ...

a box contains 4 white and 6 green balls.Two balls are drawn randomly with replacement.Show the probability on tree dig.

Express the product of -9p3r and the quantity 2p - 3r, Express the product ...

Express the product of -9p3r and the quantity 2p - 3r in simplified form. The translated expression would be -9p3r(2p - 3r). Noticed that the key word product means multiply.

Velocity of derivation, Velocity : Recall that it can be thought of as sp...

Velocity : Recall that it can be thought of as special case of the rate of change interpretation. If the situation of an object is specified by f(t ) after t units of time the vel

Michael has 16 cds how many cds does kathleen have, Michael has 16 CDs. Th...

Michael has 16 CDs. This is four more than twice the amount that Kathleen has. How many CDs does Kathleen have? Let x = the number of CDs Kathleen has. Four more than twice th

Give the introduction about graphing, Give the  introduction about Graphin...

Give the  introduction about Graphing? Somebody tells you that x = 5 and y = 3. "What does it all mean?!" you shout. Well here's a picture: This picture is what's call

Total linear attenuation, Consider the task of identifying a 1 cm thick bre...

Consider the task of identifying a 1 cm thick breast cancer that is embedded inside a 4.2 cm thick fibroglandular breast as depicted in Fig. The cancerous tumor has a cross

Shares and dividends, how to see shares and dividends of a company and are ...

how to see shares and dividends of a company and are they seen day wise?

How many teachers are there at russell high, There are 81 women teachers at...

There are 81 women teachers at Russell High. If 45% of the teachers in the school are women, how many teachers are there at Russell High? Use the proportion part/whole = %/100.

Percents., the cost of paint used in a redecorating job is $65.70 .This is ...

the cost of paint used in a redecorating job is $65.70 .This is a reduction from its original cost of $82.13 .What is the percent decrease in the cost of paint to the nearest perce

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