dS/S = d Log(S) ?

[itsyourz]

Hi,

in 06 practice exam set I , number 40.

about Geometric Brown Motion.

I know S is lognormally distributed and then ln(S) is normally distributed

how come is dS/S normally distributed?

it says dS/S equals to d ln(S)

is it mathmatically equal?

 

[David Harper CFA FRM]

okaybody,

Yes, dlnS = dS / S

Although, i won't lie, I got that question wrong so i think it's tough
http://www.wilmott.com/messageview.cfm?catid=8&threadid=66557

The math is simple derivative equality but I find the *intuition* challenging as: S and S1/S0 are lognormal

David