<t>Hi all,I got a PhD in physics (probability, stochastic calculus, modeling the financial time series and so on ... )I would like to start a career in quantitative finance, but I'm not comfortable with the hiring procedures yetas I started my research at the beginning of January.2 weeks ago I got i...

<t>QuoteOriginally posted by: tjuThis is obviously wrong, so could someone please explain to me why I assume that it has something to do with S(t) being a stochastic random variable ...yes!the differentiald ln(S)is not onlydS /Syou have to add the Ito 'correction'- 1/2 sigma^2 dtso thatdS/S = mu dt ...

Hi,for a function of a single variable the partial derivative is equal to the 'normal' derivative.In your case:a=f(b)b=g(c) , namely a=f[g(c)]you correctly computed d(a)/d(c) = d(a)/d(b) * d(b)/d(c)I think that writingdel(a)/del(c) = del(a)/del(b) * del(b)/del(c)is the same!