|Author||Topic: andom walk with drift|
|In quants, we speak about random walk with drift and that if we have a drift, b0 is different than 0, but what exactly is the drift supposed to mean?|
|It means that b0 <> 0.
Literally, that's the definition of drift.
Tomorrow's value is expected to be larger than today's.
Or, tomorrow's value is expected to be smaller than today's.