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Management Studies

Question: Investigate the stability of the origin for solutions of the stochastic linear differential equation (3.85) if the differentials are interpreted in the Itô sense or in the Stratonovich sense, show that different stability criteria are obtained depending on the interpretation of the differentials in the equation

dx(t) = ax(t)dt + bx(t)dw(t), x(0) = x_{0 (3.85)}

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