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Gliffy Diagram
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Some motivation

Having an understanding of stochastic processes is really quite critical to good risk analysis modeling, so we encourage you to put some effort into this section. In school physics lessons we learn about different types of motion (simple harmonic, rolling, sliding, parabolic flight, etc). Attached to each type of motion we learn some equations that completely describe whatever we wish to know. Then we go out into the world and see any number of examples of these types of motion. Learn to identify the types of motion in the real world, and know the associated equations, and you can describe a huge number of problems, from planetary motion, electrons around an atom, missile and rocket trajectories, to rolling a snowball down a hill. The same applies to these stochastic processes: understand their characteristics and thus how to spot them in the real world, learn how to use the equations, and you will be able to solve a vast number of problems with ease.

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