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In the Black Scholes (1973) model, the stock price is assumed to follow a geometric Brownian motion $\mathrm{d}S_t=S_t\mu \mathrm{d}t + S_t \sigma \mathrm{d}W_t$. If you solve the SDE, $(S_t)$ is log-normally distributed for every $t$. Alternative, you can model the returns by a normal distribution and then take the exponential function to obtain the stock ...


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