Hi all, I'm confused as to how to apply Ito's Lemma to g(t,z_t), as I can't seem to get to the solution provided - would it be possible to provide a breakdown? Thanks in advance!
Hi all, I've managed to get the answer for this but only by using Taylor's formula. When do you know when to use Ito's Lemma vs Taylor's formula? Thanks in advance!
Great, I'm glad it worked out. Taylor's formula is used to derive Ito's Lemma - so you can use either method to arrive at the same result.
