The process for the stock price in equation (13.8) is AS US At+oSeAT where u and are

Question:

The process for the stock price in equation (13.8) is AS US At+oSeAT where u and are constant. Explain carefully the difference between this model and each of the following: $ = + AS =S At+AI AS=At+oSeAt Why is the model in equation (13.8) a more appropriate model of stock price behavior than any of these three alternatives?

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