medium · Quantitative Finance stochastic
What happens to the quadratic variation of a process X_t = μ t + σ W_t over the interval [0, T]?
- It equals σ² T, being entirely independent of the drift μ.
- It is a random variable that depends on the path taken by W_t.
- It is equal to zero because the process is continuous.
- It equals (μ^2 + σ^2) T.
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