I am reading Longstaff and Schwartz Valuing Aerican Options by Simulation because monte carlo simulations, especially their use in option pricing, is interesting to me. However, I am having some difficulty getting through the numerical example - not from lack of understanding the big picture but recreating the example myself.
On page 116 the authors discuss stock price paths - they say they are generated under the risk neutral measure but I am missing some background here that will allow me create this example on my own for understanding (or a different example for me to work through). I feel that the authors left out some critical information here on exactly how this example was produced.
Can anyone explain to me how these stock prices are generated, or link me to resources so I can figure it out myself? It would go a long way towards me fully understanding this paper.