(6) Consider the SDE dS(t) = 0.5S(t)dt+2S(t)dW(t), where S(0) is a constant. Does a UNIQUE solution exist? If so find it. The following answers are proposed. (a) The SDE does not satisfy the conditions of the existence of a unique solution. So multiple solutions can exist. (b) The unique solution is S(t) = S(0) exp (1.5t +2W(t)) (c) The unique solution is S(t) = S(0) exp(-1.5t+2W(t)} (d) No solution exists. (e) None of the above is correct. Choose the best answer. (a)

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