How do you find the variance of an Ito Integral?

975 Views Asked by At

It is known that the expectation of an Ito integral is zero. Is there some property like this for the variance of an Ito integral? In particular, I am dealing with the following integral:

$Var[\int_{0}^{t}e^{-\gamma(t-s)}dW_{s}]$

Where $\gamma$ is constant. How should I go about solving this?

Thanks!

1

There are 1 best solutions below

0
On BEST ANSWER

For any (deterministic) function $f$ the random variable $\int_0^t f(s)dW_s$ has normal distribution with mean 0 and variance $\int_0^t f^2(s)ds.$ The variance formula is because of the Ito isometry. If $f$ is an square-integrable adapted process, the formula for the variance is the same but the distribution of the integral is not normal anymore.