• Is a condition in finance or economics whereby changes occur on a more abrupt basis than those expected to be normally encountered. In some ways stochastic has infinite variance and/or non-converging means implications.

 Embedded terms in definition
 Referenced Terms
 Deterministic models: Liability-matching models that assume that the liability payments and the asset cash flows are known with certainty. Related: Compare Stochastic models

 Wiener process: Is a type of Markov Stochastic process. It refers to changes in value over small time periods. Sometimes, this process is also called Brownian motion.

 Related Terms
 Stochastic models

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