# Tag Info

Let's skip to the stochastic differential equation (SDE): $$dF=\left[\frac{\partial F}{\partial t}+\mu \frac{\partial F}{\partial x}+\frac{1}{2}\sigma^2 \frac{\partial^2 F}{\partial x^2} \right]dt + \sigma \frac{\partial F}{\partial x}dW$$ What does this equation actually represent? It suggests that a change in $F$ (represented by $\Delta F$) equals a ...