Option Pricing in Continuous Time Makes Use of Wiener Processes $W _ { t }$

question 6

Multiple Choice

Option pricing in continuous time makes use of Wiener processes.Which of the following is not a property of a Wiener process $W _ { t }$ ,given $W _ { 0 } = 0$ ?

• A)The process has independent increments \(W _ { t } - W _ { s }\)
• ,for
• \(t > s\)
• )
• B)Increments are normally distributed.
• C)For each \(\pm\)
• ,
• \(W _ { t }\)
• Is normally distributed with mean zero and variance
• \(t ^ { 2 }\)
• )
• D)The process \(\left( W _ { t } \right)\)
• Is a symmetric random walk around zero.

---

Definitions:

Self-Serving Decisions

Choices made that primarily benefit the decision-maker, often at the expense of others or ethical norms.

Balancing Interests Principles

Involves creating a fair and equitable approach to managing and reconciling the diverse and often competing interests of stakeholders in an organization or a project.

Probability of Effect

refers to the likelihood or chance that a specific action or condition will lead to a particular outcome or result.

Concern for Harmony Principles

Ethical values that prioritize peaceful, cooperative, and non-confrontational relations among individuals or groups.