---
title: "Multiplicative random walk"
canonical: "https://modelassist.epixanalytics.com/space/EA/26575451/Multiplicative%20random%20walk"
format: markdown
---
A random walk model with no memory where the change is proportional to the variable size.

 

 

S<sub>t</sub>=S<sub>t-1</sub>*Normal(1+*m*,*s*)

 

![image](media://780caaa4-7102-48da-a482-bf7c0a158762)

 

 

Similar to [Random Walk 1](https://epixanalytics.atlassian.net/wiki/spaces/EA/pages/26577359). The variable is a random displacement from its previous value proportional to the size of that previous value. Other distributions can, of course, be used in place of the Normal.

 

S<sub>t</sub> expands with increasing t, and easily go negative.

 

> Macro (anchor)



The links to the Random Walk 2 software specific models are provided here:

<details>
<summary>Crystal Ball</summary>

> Macro (inline-media-image)

 [Random_walk_2](/wiki/download/attachments/26579343/Random_walk_2-CB.xlsx?version=1&modificationDate=1506113502000&cacheVersion=1&api=v2)
</details>

<details>
<summary>@Risk</summary>

> Macro (inline-media-image)

 [Random_walk_2](/wiki/download/attachments/26581760/Random_walk_2-AtRISK.xlsx?version=1&modificationDate=1506097522000&cacheVersion=1&api=v2)
</details>

 

 

<span style="color: #999999"> </span>

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