A lognormal distribution is used as the standard model stock price returns in financial economics. In this article we will go in the depth to why this is so.

## Statistical Distributions

Before talking about stock price return as lognormal distribution, I want to give a quick overview of normal and lognormal distributions.

Note: this is not a complete tutorial on normal and lognormal distributions but I do talk about the properties that are important for the purpose of this article.