• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

ST6 Sept 2013 Q1

T

trog_8

Member
Hi all,

I am getting myself confused with the lognormal distribution in this question and I was hoping someone would be able to help me.

I can understand why Ln(S4) follows a N(-15.697,50) distribution.

Now my current understanding is that S4 should then follow a LogNormal distribution with mean exp(mu + 0.5*sigma^2) and variance exp(2*mu +sigma^2)*(exp(sigma^2) - 1) where mu and sigma^2 are the mean and variance of Ln(S4) respectively.

However, the examiners report has S4 as having a mean of -15.697 and variance 50 which is equal to mu and sigma.

Following my understanding/method I get a S4 mean of 10,971.

Thanks
 
Back
Top