The stock Price Assumption Consider a stock whose price is s In a short period of time of length At the change in then stock price S is assumed to be normal with mean Sdt and standard deviation os√△, that is, S follows geometric Brownian motion ds=u Sdt+oSdz Then dInS=( )dt+oda
ENGINEERING ECONOMICS II INVESTMENT ANALYSIS Companies(and individuals) invest money in order to earn money Examples Build a factory to make washing machines and dryers → Open laundromat Write novel(what is being invested here?) Get a degree in chemical engineering