Take the 2-minute tour ×
Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. It's 100% free, no registration required.

What is the dimension of Δt? Is it second [s]? What are the expected return and the expected volatility? How can I calculate them for any given stock? Should I use the return and volatility values for the moment in which I need to simulate the price? Is ε a random variable | ε ∈ [0,1) with an expected value of 1/2?

enter image description here

  • S(0): The stock price today.
  • S(Δt): The stock price at a (small) time into the future.
  • Δt: A small increment of time.
  • μ: The expected return.
  • σ: The expected volatility.
  • ε: A (random) number sampled from a standard normal distribution.

migration rejected from money.stackexchange.com Aug 20 at 12:33

This question came from our site for people who want to be financially literate. Votes, comments, and answers are locked due to the question being closed here, but it may be eligible for editing and reopening on the site where it originated.

closed as off-topic by Bob Jansen Aug 20 at 12:33

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Basic financial questions are off-topic as they are assumed to be common knowledge for those studying or working in the field of quantitative finance." – Bob Jansen
If this question can be reworded to fit the rules in the help center, please edit the question.

Sorry, it's too basic to be on-topic here. –  Bob Jansen Aug 20 at 12:33

Browse other questions tagged or ask your own question.