Consider a variable,, that follows the process dS dt dz For the first three years, 2 and 3 for the next three years, 3 and 4 If the initial value of the variable is 5, what is the probability distribution of the value of the variable at the end of year six ...

The change in during the first three years has the probability distribution The change during ...

Consider a variable,, that follows the process dS = dt + dz For the first

Question:

Consider a variable,, that follows the process

dS = μ dt + σ dz

For the first three years, μ = 2 and σ = 3; for the next three years, μ = 3 and σ = 4. If the initial value of the variable is 5, what is the probability distribution of the value of the variable at the end of year six?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...