Lognormal distribution

[DURound]

I would have thought it would have helped to show the normal distribution of the logged values of the stock price.

[Eisaal]

Thank you for the helpful videos

[easykill102]

Thanks, really helped

[saleemo20]

I already figured out the bin ranges! thanks for the video. quick questions, why do we do 1000 trials? can i access most of the spreadsheets on ure site? where in your site can they be found?

[saleemo20]

thanks for the video david. However, i am having a hard time as to ow you got the bin and freq. it would be helpful if you get explain me how the bins were achieved. thank you!

[DannyZ225]

Great illustration! Thanks, David.

[doveisle]

Bravo!! I didn't quite get it this time but much better than my teacher taught me. I'll get it in a couple of times.

[YoyoTube125]

Hi David,

Thank you for this clip. I was over-whelmed by the ideas of lognormally distributed & normally distributed. Your clip really saved me and the screen shot of excel helps a lot as well. Thank you!

[Sewanixx]

Thank you for the explanation David. Great work!!!

[ginomont]

First of all congratulations of this video, in the other hand If you want to know what is exactly a lognormal distribution start to hear since 2:25, good luck

[alphaferrari]

thank youuuuuuuuuuuuuuuuuuuuuuu so much!

[renay18g]

Hi David. Thanks for the video. I understand how to get the lognormal distribution but I don't understand how this is beneficial over a normal distribution. Why use a lognormal distribution to model asset prices?

Thanks.

[bionicturtledotcom]

Right, the motive is indeed to treat periodic asset RETURNS as continuous and normal. So, it does start with normal but for returns. If $10 goes to $11, that's a return of LN($11/10) = 9.5% because 10*EXP(9.5%) = $11. The return is normal which implies that price LEVELS or RATIOS ($11/$10) are lognormal. It is difficult idea but the meaning of lognormal is that the log [i.e., LN()] is normal.

[alphaferrari]

so what you're saying is thhis;' this share price distribution follows simple geometric distribution, therefore, we can also use geometric mean too.'

if you do not agree with this, then plz explain.

[bionicturtledotcom]

Well, i don't know about geometric distribution. But if the distribution of price levels is lognormal, then its mean is different from its median (unlike the normal, where they are the same); i.e., future expected price median not equal to to future expected prce mean. So, there can be two meanings of expected average future price

[badboy4life414]

this was asum...

[iamtchiko4]

Hello David. Starting to read Stephen J. Taylors "Asset Price Dynamics, Volatility, and Prediction" and it lacks of practical examples and graphs. Thank you for this complement. "Visual learning" suits me better