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What is Ito's lemma used for in quantitative finance?
Further to my question asked here: prior post
and which left some points unanswered, I have reformulated the question as follows:
What is Ito's lemma used for in quantitative finance? and when is it ...
10
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5answers
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Monte carlo methods for vanilla european options and Ito's lemma.
I understand that by applying Ito's lemma to the following SDE
$$dX=\mu\,X\,dt+\sigma\,X\,dW$$
one obtains a solution to the above SDE which is as follows:
$${X}\left( t\right) =\mathrm{X}\left( ...
