FRM: Lognormal distribution
Here I explain an idea that is confusing the first time you see it: a variable is lognormally distributed if its log (or natural log) is normally distributed. I use an example of future stock price: it the rate of return is normally distributed (it can be negative), the future stock price level is lognormally distributed (it cannot be negative!). For more financial risk videos, visit our website! http://www.bionicturtle.com