The log-normal distribution - Chapter 15

Discussion in 'CT1' started by prmenon, Jan 3, 2010.

  1. prmenon

    prmenon Member

    While i have understood Fixed and Varying interest rate model, i am finding it really difficult to understand log normal distribution. How is the normal distributions mean and variance related to mean and variance of log-normal distribution? What does the mean and variance of log normal distribution used for and what does this number signify?

    Which of these mean and variance should used to find the accumulation of the cash flow?
     

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