Question: Problem 8. Consider the stochastic process X which satisfies the stochastic differ- ential equation dxt = 2(4-Xt) dt + 3dZt == where Z is

Problem 8. Consider the stochastic process X which satisfies the stochastic differ- ential equation dxt = 2(4-Xt) dt + 3dZt == where Z is the usual Brownian motion process. Consider the stochastic process Y define as Y = 1/Xt. Your are given that dYa(Y) dt + (Yt)dZt for some functions a(y) and (y). Compute a(0.25) + (0.25).

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