Lognormal bell curve rather than normal bell curve?

christopherf

New member
Jun 10, 2008
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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?
 
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