3. Use Itos Lemma to evaluate dS 1. For the following four problems, use Itos Lemma to...

3. Use Itˆo’s Lemma to evaluate dS −1.

For the following four problems, use Itˆo’s Lemma to determine the process followed by the specified equation, assuming that S(t) follows

(a) arithmetic Brownian motion, equation (8);

(b) a mean reverting process, equation (9); and

(c) geometric Brownian motion, equation (11).