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1 Introduction to Stochastic Processes

1 Introduction to Stochastic Processes

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MA636: Introduction to stochastic processes 1–5 1.4.1 Exchange rates Figure 1: Exchange rate between British pound and Japanese yen over the period 1/1/02-31/7/04. Upper graph shows true exchange rate, lower graph shows a simulation of a random walk model. The upper panel of Figure 1 shows the exchange rate between the

  Processes, Random, Processes 1

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