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stochastic process

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Noun1.stochastic process - a statistical process involving a number of random variables depending on a variable parameter (which is usually time)
framework, model, theoretical account - a hypothetical description of a complex entity or process; "the computer program was based on a model of the circulatory and respiratory systems"
Markoff process, Markov process - a simple stochastic process in which the distribution of future states depends only on the present state and not on how it arrived in the present state
random walk - a stochastic process consisting of a sequence of changes each of whose characteristics (as magnitude or direction) is determined by chance
stationary stochastic process - a stochastic process in which the distribution of the random variables is the same for any value of the variable parameter


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The book provides an overview of the stochastic process used in stochastic finance.
2], [a, b]) is a stochastic process defined by [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] Then the Girsanov Theorem states that if the exponential process [E.
The methodology involves: fuzzy numbers, to represent certain types of uncertainties that do not have a known stochastic process or probability distribution that can correctly model them; stochastic processes, to represent other kinds of uncertainties; and Monte Carlo simulation, to generate a good approximation of the real option value.
 
 
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