Tag Info

Hot answers tagged


You derivation here is flawed because you are deriving with respect to two processes and you do not take into account that the variable $W_t$ is stochastic and hence $S_t$ is as well. So, to derive $S_t$ from $dS_t$, you have to apply Ito's Lemma, see this question for details. This is the "classic" way you see it. If you want to do it the other way ...

Only top voted, non community-wiki answers of a minimum length are eligible