Question: Consider the equation Xt = X0 + dt + Wt, with Yt = eXt . Assuming = 0.1, = 0.15 and a time

Consider the equation Xt = X0 + μdt + σWt, with Yt = eXt . Assuming μ = 0.1, σ = 0.15 and a time period t = 0.5, generate paths for Xt and Yt by generating random normal variables Wt. Compute the expectation of Xt and Yt. Plot histograms of Xt and Yt. What does it look like they follow?

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