A Variable X Starts at Zero and Follows the Generalized

question 16

Multiple Choice

A variable x starts at zero and follows the generalized Wiener process dx = a dt + b dz
Where time is measured in years.During the first two years a=3 and b=4.During the following three years a=6 and b=3.What the standard deviation of the value of the variable at the end of 5 years

• A) 6.2
• B) 6.7
• C) 7.2
• D) 7.7

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