**Stochastic calculus** is a branch of

mathematics that provides the formal framework and quantitative tools needed for modelling

stochastic processes, which are specified through one or more integral and/or

differential equations involving both deterministic and random (i.e. stochastic) variables. The classical example of an stochastic process is the so called

Brownian motion, originally developed by

Albert Einstein to model the diffusion in space of particles subject to random forces. Later, the concept has been widely applied in

financial mathematics to model the evolution in time of stock and bond prices.

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