<t>The Wiener process Wt is characterized by three facts:W0 = 0 Wt is almost surely continuous Wt has independent increments with distribution Wt - Ws ~ N ( 0, t-s) (for 0 ≤ s < t). is there a proof available, why variance of weiner process is (t-s) ? can some explain in both math and non math way ?...

Can some one elaborate on why Standard Normal distribution is having Mean of 0 and Std deviation of 1 ?

Can any one explain why Normal distirbution has mean of 0 and Standard deviation of 1 ? Please do not use sophisticated math language !!!

<t>In Hull's book - "Option future and other derivatives", at Page 265 it has been mentioned that"When markov processes are considered, the variance of the changes in successive time timeperiod are additive. The standard devaiations of the standard deviations of the changesin successive time periods...

Can any one explain why do we multiply daily volatility with Square root of time? What is Square root of time rule ?

Thanks again.Can you post the paper on downside variability which is mentioned in your reply ?

<t>Thanks a lot for a nice explanation. I have a further query in this regard.How can I predict negative volatility in case of daily fall in prices more compared to daily increses?. As volatility is a squared standard deviation of log returns which will always be an absolute number. Also how can i i...

Why do we take log returns while calculating volatility ? Can some one elaborate more on this ?