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Re: A natural definition of smoothness?
Posted:
Feb 21, 2012 11:52 AM
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On Tue, 21 Feb 2012 16:01:44 +0000, Frederick Williams
<freddywilliams@btinternet.com> wrote:
>"David C. Ullrich" wrote:
>
>> But probably you're aware that people seem to think that
>> Brownian motion is a reasonable model for stock prices?
>
>I didn't know that. To me Brownian motion has to do with bacteria being
>knocked about by water molecules. So is it just a matter of chance that
>the two are mathematically similar? (No, because if it were you
>wouldn't (or they wouldn't) use the word 'model'.) So why should stock
>prices be reasonably modelled by Brownian motion?
I don't really know - you'd have to ask "them". And for that matter
it's quite possible that I'm simply all wet here.
But a person can imagine a stock price being knocked about by
a large number of small independent forces...
I think I read an article by Mandelbrot or someone in
Scientific American a while ago about exactly this. (???)
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