can you solve this question?

[eric]

i need help. can you solve this question which i can not?

Let Wt be a Wiener process. Consider the geometric process St :

St=So*e^((µ-(1/2)s^2)t+sWt)

1, calculate dSt
2, what is the"expected rate of change" of St?
3, If the exponential term in the definition of St did not contain the
((1/2)s^2)t term,what would be the dSt? What would then be the
expected change in St?

[actuaryalfred]

Have a look at Ito's lemma in any book. This question is just an easy
application of that.

1. dSt = St (mu t + s Wt)
2. The drift rate is mu
3. dSt = St [(mu + (1/2)s^2)t t + s Wt]