Lognormal distribution Video

Here I explain an idea that is confusing the first time you see it: a variable is lognormally distributed if its log (or natural log) is normally distributed. I use an example of future stock price: it the rate of return is normally distributed (it can be negative), the future stock price level is lognormally distributed (it cannot be negative!).

Very? helpful, ...
Very? helpful, thanks. I think the key insight to "unlock" the concept is that you're taking a normally distributed variable? (i.e., returns) and plugging it in as the exponent. The resulting values will be a right skewed distribution due to the non-linear output of exponents

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

Thank you? for the ...
Thank you? for the helpful videos

Thanks,? really ...
Thanks,? really helped

mail change you can ...
mail change you can enter your massage ? benaughtyman.info

I already figured ...
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?

thanks for the ...
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!

thanks for the ...
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!

Great illustration ...
Great illustration!? Thanks, David.

Bravo!! I didn't ...
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.

Hi David, Thank ...
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!

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

First of all ...
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

Well, i don't know ...
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

Right, the motive ...
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.

Hi David. Thanks? ...
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.

this was asum...?
this was asum...?

Hello David. ...
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

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