Chapter 5 Large sample properties of the LSE 5.1 Stochastic convergence Suppose that Xn} is a sequence of random varia bles with a corresponding sequence of distribution functions{Fn} If Fn(x)(x) at every continuity point x of F, Fn is said to converge weakly to F, written FnF. In this case,{xn} is said to converge in distribution to where
Derivatives Dependent on a single Underlying Variable Consider a variable, 0, (not necessarily the price of a traded security) that follows the process d e S Imagine two derivative s dependent on e with prices f, and f2. Suppose