Question

Discuss the classification of stochastic processes with suitable examples

Answer 1

Stochastic process or random process is a collection of random variables ordered by an index set. A stochastic process is a probability model describing a collection of time-ordered

random variables that represent the possible sample paths. Stochastic processes can be classified on the basis of the nature of their parameter space and state space.

Stochastic processes classification

1. Stochastic Processes with Discrete Parameter and State Spaces

2. Stochastic Processes with Continuous Parameter and Discrete State Space

3. Stochastic Processes with Discrete Parameter and Continuous State Space

4. Stochastic Processes with Continuous Parameter and State Spaces