Tier 4 · QuantFree

Stochastic Processes

A Random Walk

11 modules~76 min totalVerifiable certificate on completion

Syllabus

01Probability FoundationsMath
8 min
02Brownian MotionMath
8 min
03Stochastic Differential EquationsMath
7 min
04Itô's LemmaMath
7 min
05Deriving Black-ScholesMath
8 min
06Limitations of the ModelMath
8 min
07The Wiener Process
6 min
08Geometric Brownian Motion
6 min
09Mean Reversion
6 min
10Jump Diffusion
6 min
11Path Dependence
6 min

From Module 1 — read a sample

Think of a random variable like a function that converts coin flips into numbers — heads maps to 1, tails to 0. Expected value E[X] is the long-run average of all those outputs across millions of flips. A normal distribution is a bell curve where most outcomes cluster near the mean and extreme outcomes are rare; the standard deviation σ controls how wide the bell is.

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