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how to extend lognormal model so that $\sigma$ is correlated to $\mu$?
Consider a log-normal model, $dx / x = \mu dt + \sigma dW$, where $W(t)$ is a Wiener process. Let's say $\mu$ and $\sigma$ change with time, slowly, so we note them by $\mu(t)$ and $\sigma(t)$. ...
Aug 15 '13 at 14:14
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