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# lognormal-property

1. ### YouTube T4-10: Lognormal property of stock prices assumed by Black-Scholes

Although the Black-Scholes option pricing model makes several assumptions, the most important is the first assumption that stock prices follow a lognormal distribution (and that volatility is constant). Specifically, the model assumes that log RETURNS (aka, continuously compounded returns) are...
2. ### P1.T4.814. The lognormal property of stock prices and the assumptions of Black-Scholes-Merton (BSM) (Hull Ch.15)

Learning objectives: Explain the lognormal property of stock prices, the distribution of rates of return, and the calculation of expected return. Compute the realized return and historical volatility of a stock. Describe the assumptions underlying the Black-Scholes-Merton option pricing model...