christopherf
New member
- Jun 10, 2008
- 11
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In discussing the movement of stock prices, finance quants talk about log-normal bell curves. Can someone give me a brief explanation of why "log-normal" rather than plain ol' normal?
Stock prices can't get below zero. (Because investors in equity, as a matter of law, are protected from the liabilities.) That may be pertinent. Is log used to keep the left hand tail of the curve from getting into negative numbers?
Stock prices can't get below zero. (Because investors in equity, as a matter of law, are protected from the liabilities.) That may be pertinent. Is log used to keep the left hand tail of the curve from getting into negative numbers?