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Postby anbu.edu » Sun Oct 06, 2013 7:51 am

or a lognormal variable X, we know that ln(X) has a normal distribution with a mean of zero and a standard deviation of 0.5. What are the expected value and and the variance of X?
Choose one answer.
a. 1.025 and 0.187 Incorrect
b. 1.126 and 0.217 Incorrect
c. 1.133 and 0.365 Correct
d. 1.203 and 0.399 Incorrect
The correct answer is 1.133 and 0.365.
We have E[X] = exp[mu+0.5*sigma2] = exp[0+0.5 * 0.52] =1.1331. Assuming there is no error in the answers listed for the variance, it is sufficient to find the correct answer for the expected value.

Please explain this question.. i cant understand this

Finance Junkie
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Postby pradeeppdy » Thu Oct 10, 2013 6:43 am

Here the corresponding normal distribution has a mean = 0,
And the all items are given here to find out the answer.

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