--- title: "Meaning & Key Takeaway of: Our research led on to other things, such…" description: "\"Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.\" — John Hull" image: "https://sms4smile.com/quotes/i/b5d/john-hull-28186_distributed_our-research-led-on-to-other-things-such_1813722.jpg" --- # Our research led on to other things, such as the fact that… ![“Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.” quote by John Hull](https://sms4smile.com/quotes/i/b5d/john-hull-28186_distributed_our-research-led-on-to-other-things-such_1813722.jpg) [Download](https://sms4smile.com/quotes/i/b5d/john-hull-28186_distributed_our-research-led-on-to-other-things-such_1813722.jpg) [Open image](https://sms4smile.com/quotes/i/b5d/john-hull-28186_distributed_our-research-led-on-to-other-things-such_1813722.jpg) > “Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.” [John Hull](https://sms4smile.com/quotes/author/john-hull/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Research shows exchange rates deviate from lognormal distribution, indicating more complex financial behavior than simple models suggest. **In simple terms:** Exchange rates aren’t lognormally distributed. Key Takeaway Use realistic models for financial analysis. Themes finance statistics modeling Mood technical analytical Type academic educational When to use this quote - trading - policy making Key Concepts risk management econometrics Questions to Reflect On - Why do rates deviate? - What alternative models work better? A Different Perspective Simplified models can mislead risk assessment. ★ ★ ★ ★ ★ No ratings yet [Distributed](https://sms4smile.com/quotes/about/distributed/) [Exchange](https://sms4smile.com/quotes/about/exchange/) [Exchange Rates](https://sms4smile.com/quotes/about/exchange-rates-620974/) [Fact](https://sms4smile.com/quotes/about/fact/) [Led](https://sms4smile.com/quotes/about/led/) [Lognormally Distributed](https://sms4smile.com/quotes/about/lognormally-distributed-2137047/) [Other](https://sms4smile.com/quotes/about/other/) [Our](https://sms4smile.com/quotes/about/our/) [Rates](https://sms4smile.com/quotes/about/rates/) [Rates Lognormally](https://sms4smile.com/quotes/about/rates-lognormally-2137046/) [Research](https://sms4smile.com/quotes/about/research/) [Research Led](https://sms4smile.com/quotes/about/research-led-2137045/) [Things](https://sms4smile.com/quotes/about/things/) ## Related quotes > [Foreign exchange rates are determined by various factors.](https://sms4smile.com/quotes/fumio-kishida/foreign-exchange-rates-are-determined-by-various-factors/) [Fumio Kishida](https://sms4smile.com/quotes/author/fumio-kishida/) > [“when the monetary value of output per capita in Nigeria is less than 2 percent of that in the United States-and in Tanzania less…](https://sms4smile.com/quotes/thomas-sowell/when-the-monetary-value-of-output-per-capita-in-nigeria-is-less-than/) [Thomas Sowell](https://sms4smile.com/quotes/author/thomas-sowell/) > [When financial sectors are small and capital is mobile, floating exchange rates spell massive currency volatility. When a lot of foreign capital flows in,…](https://sms4smile.com/quotes/zanny-minton-beddoes/when-financial-sectors-are-small-and-capital-is-mobile-floating/) [Zanny Minton Beddoes](https://sms4smile.com/quotes/author/zanny-minton-beddoes/) > [The problem is that, in a world of floating exchange rates, as Italy was before the euro, if one country is subjected to a…](https://sms4smile.com/quotes/milton-friedman/the-problem-is-that-in-a-world-of-floating-exchange-rates-as-italy/) [Milton Friedman](https://sms4smile.com/quotes/author/milton-friedman/) > [Most economists use 'fixed' and 'pegged' as interchangeable or nearly interchangeable terms for exchange rates.](https://sms4smile.com/quotes/steve-hanke/most-economists-use-fixed-and-pegged-as-interchangeable-or-nearly/) [Steve Hanke](https://sms4smile.com/quotes/author/steve-hanke/) > [The lesson for Asia is; if you have a central bank, have a floating exchange rate; if you want to have a fixed exchange…](https://sms4smile.com/quotes/milton-friedman/the-lesson-for-asia-is-if-you-have-a-central-bank-have-a-floating/) [Milton Friedman](https://sms4smile.com/quotes/author/milton-friedman/) > [There are so many currency exchange rate problems that people are buying gold as a safe haven. Right now, gold looks like a safe…](https://sms4smile.com/quotes/michael-hudson/there-are-so-many-currency-exchange-rate-problems-that-people-are/) [Michael Hudson](https://sms4smile.com/quotes/author/michael-hudson/) > [Trade balances are determined by national savings propensities, not exchange rates.](https://sms4smile.com/quotes/steve-hanke/trade-balances-are-determined-by-national-savings-propensities-not/) [Steve Hanke](https://sms4smile.com/quotes/author/steve-hanke/) > [We believe in fair exchange rates and Japan doesn't practice that. They have massive U.S. dollar reserves, and they use them to intervene regularly.](https://sms4smile.com/quotes/anonymous/we-believe-in-fair-exchange-rates-and-japan-doesn-t-practice-that/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest…](https://sms4smile.com/quotes/john-hull/the-real-challenge-was-to-model-all-the-interest-rates-simultaneously/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [The problem with interest rates are that you are not modeling a single number, you are modeling a whole term structure, so it is…](https://sms4smile.com/quotes/john-hull/the-problem-with-interest-rates-are-that-you-are-not-modeling-a/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [When interest rates are high you want the average direction in which interest rates are moving to be downward; when interest rates are low…](https://sms4smile.com/quotes/john-hull/when-interest-rates-are-high-you-want-the-average-direction-in-which/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [When we distributed the paper and crayons, they were fighting over the blue crayon. Everyone wanted to start with the blue, and that was…](https://sms4smile.com/quotes/connie-sellecca/when-we-distributed-the-paper-and-crayons-they-were-fighting-over-the/) [Connie Sellecca](https://sms4smile.com/quotes/author/connie-sellecca/) > [I think that content posted to Twitter is distributed to more platforms, services, sites, online and offline than any other services out there. Would…](https://sms4smile.com/quotes/dick-costolo/i-think-that-content-posted-to-twitter-is-distributed-to-more/) [Dick Costolo](https://sms4smile.com/quotes/author/dick-costolo/) > [The Internet is a clear example of how our lives have changed in ways we couldn't have imagined: a distributed information source, which is…](https://sms4smile.com/quotes/lawrence-m-krauss/the-internet-is-a-clear-example-of-how-our-lives-have-changed-in-ways/) [Lawrence M. Krauss](https://sms4smile.com/quotes/author/lawrence-m-krauss/) ## More by John Hull > [The HoLee model was the first term structure model. I remember reading their paper soon after it was published and as it was fairly…](https://sms4smile.com/quotes/john-hull/the-holee-model-was-the-first-term-structure-model-i-remember-reading/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Alan White and I spent the next two or three years working together on this. We developed what is known a stochastic volatility model.…](https://sms4smile.com/quotes/john-hull/alan-white-and-i-spent-the-next-two-or-three-years-working-together/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [I didn't become interested in derivatives until 1982, 1983.](https://sms4smile.com/quotes/john-hull/i-didn-t-become-interested-in-derivatives-until-1982-1983/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [I guess any simple idea that is really good will catch on quickly.](https://sms4smile.com/quotes/john-hull/i-guess-any-simple-idea-that-is-really-good-will-catch-on-quickly/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Briefly speaking, our conclusion is that stochastic volatility does not make a huge difference as far as the pricing is concerned if you get…](https://sms4smile.com/quotes/john-hull/briefly-speaking-our-conclusion-is-that-stochastic-volatility-does/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Our starting point then was trying to find a way to incorporate mean reversion into the HoLee model.](https://sms4smile.com/quotes/john-hull/our-starting-point-then-was-trying-to-find-a-way-to-incorporate-mean/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [We concluded that you cannot rely on delta hedging alone. It sounds simplistic to say that now, but back then, this was the sort…](https://sms4smile.com/quotes/john-hull/we-concluded-that-you-cannot-rely-on-delta-hedging-alone-it-sounds/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [We started giving presentations at practitioner conferences in 1986, and since then all of our derivatives research has been stimulated by contact with practitioners.](https://sms4smile.com/quotes/john-hull/we-started-giving-presentations-at-practitioner-conferences-in-1986/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [There are challenges in terms of the measurement of VAR for what are known as nonlinear derivatives, where things like gamma and vega are…](https://sms4smile.com/quotes/john-hull/there-are-challenges-in-terms-of-the-measurement-of-var-for-what-are/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [If each of your time steps is one week long, you are not modeling the stock price terribly well over a one-week time period,…](https://sms4smile.com/quotes/john-hull/if-each-of-your-time-steps-is-one-week-long-you-are-not-modeling-the/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Yes, our tree has an interesting shape. The center branches reflect the shape of the zero curve. When extreme parts of the tree are…](https://sms4smile.com/quotes/john-hull/yes-our-tree-has-an-interesting-shape-the-center-branches-reflect-the/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest…](https://sms4smile.com/quotes/john-hull/the-real-challenge-was-to-model-all-the-interest-rates-simultaneously/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [I think VAR is a very healthy development within the industry.](https://sms4smile.com/quotes/john-hull/i-think-var-is-a-very-healthy-development-within-the-industry/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [In the interest rate area, traders have for a long time used a version of what is known as Black's model for European bond…](https://sms4smile.com/quotes/john-hull/in-the-interest-rate-area-traders-have-for-a-long-time-used-a-version/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [The problem with interest rates are that you are not modeling a single number, you are modeling a whole term structure, so it is…](https://sms4smile.com/quotes/john-hull/the-problem-with-interest-rates-are-that-you-are-not-modeling-a/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) [Explore all 19 John Hull quotes ](https://sms4smile.com/quotes/author/john-hull/) ## More Distributed quotes > [The Internet is a clear example of how our lives have changed in ways we couldn't have imagined: a distributed information source, which is…](https://sms4smile.com/quotes/lawrence-m-krauss/the-internet-is-a-clear-example-of-how-our-lives-have-changed-in-ways/) [Lawrence M. Krauss](https://sms4smile.com/quotes/author/lawrence-m-krauss/) > [I think that content posted to Twitter is distributed to more platforms, services, sites, online and offline than any other services out there. Would…](https://sms4smile.com/quotes/dick-costolo/i-think-that-content-posted-to-twitter-is-distributed-to-more/) [Dick Costolo](https://sms4smile.com/quotes/author/dick-costolo/) > [When we distributed the paper and crayons, they were fighting over the blue crayon. Everyone wanted to start with the blue, and that was…](https://sms4smile.com/quotes/connie-sellecca/when-we-distributed-the-paper-and-crayons-they-were-fighting-over-the/) [Connie Sellecca](https://sms4smile.com/quotes/author/connie-sellecca/) > [“We are out of our heads. We are in the world and of it. 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Judges in juvenile justice facilities…](https://sms4smile.com/quotes/hill-harper/my-first-two-books-letters-to-a-young-brother-and-letters-to-a-young/) [Hill Harper](https://sms4smile.com/quotes/author/hill-harper/) > [A distributed system is one in which the failure of a computer you didn't even know existed can render your own computer unusable.](https://sms4smile.com/quotes/leslie-lamport/a-distributed-system-is-one-in-which-the-failure-of-a-computer-you/) [Leslie Lamport](https://sms4smile.com/quotes/author/leslie-lamport/) > [Experience seems to be the only thing of any value that's widely distributed.](https://sms4smile.com/quotes/william-feather/experience-seems-to-be-the-only-thing-of-any-value-that-s-widely/) [William Feather](https://sms4smile.com/quotes/author/william-feather/) > [Natural gas is better distributed than any other fuel in the United States. It's down every street and up every alley. There's a pipeline.](https://sms4smile.com/quotes/t-boone-pickens/natural-gas-is-better-distributed-than-any-other-fuel-in-the-united/) [T. Boone Pickens](https://sms4smile.com/quotes/author/t-boone-pickens/) > [Automakers have been unable to build a viable electric car, mainly because batteries don't allow enough range, are too costly, and take too long…](https://sms4smile.com/quotes/charles-platt/automakers-have-been-unable-to-build-a-viable-electric-car-mainly/) [Charles Platt](https://sms4smile.com/quotes/author/charles-platt/) > [During the 1970s and 1980s, Congress distributed more than $60 billion to cities to make sure that what goes into toilets, industrial drains and…](https://sms4smile.com/quotes/charles-duhigg/during-the-1970s-and-1980s-congress-distributed-more-than-60-billion/) [Charles Duhigg](https://sms4smile.com/quotes/author/charles-duhigg/) > [We're leading a fundamental shift from centralized energy to distributed energy. 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Christakis](https://sms4smile.com/quotes/author/nicholas-a-christakis/) [Browse all 56 Distributed quotes ](https://sms4smile.com/quotes/about/distributed/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.", "creator": { "@type": "Person", "name": "John Hull" }, "isPartOf": { "@id": "https://sms4smile.com/quotes/#website" }, "url": "https://sms4smile.com/quotes/john-hull/our-research-led-on-to-other-things-such-as-the-fact-that-exchange/", "about": { "@type": "Thing", "name": "Distributed" }, "@id": "https://sms4smile.com/quotes/john-hull/our-research-led-on-to-other-things-such-as-the-fact-that-exchange/#quotation", "image": { "@type": "ImageObject", "@id": "https://sms4smile.com/quotes/i/b5d/john-hull-28186_distributed_our-research-led-on-to-other-things-such_1813722.jpg", "contentUrl": "https://sms4smile.com/quotes/i/b5d/john-hull-28186_distributed_our-research-led-on-to-other-things-such_1813722.jpg", "url": "https://sms4smile.com/quotes/i/b5d/john-hull-28186_distributed_our-research-led-on-to-other-things-such_1813722.jpg", "width": 1080, "height": 1080, "caption": "“Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.” — John Hull", "creditText": "SMS4Smile Quotes", "creator": { "@id": "https://sms4smile.com/quotes/#organization" } } }, { "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://sms4smile.com/" }, { "@type": "ListItem", "position": 2, "name": "Quotes", "item": "https://sms4smile.com/quotes/" }, { "@type": "ListItem", "position": 3, "name": "John Hull", "item": "https://sms4smile.com/quotes/author/john-hull/" }, { "@type": "ListItem", "position": 4, "name": "Our research led on to other...", "item": "https://sms4smile.com/quotes/john-hull/our-research-led-on-to-other-things-such-as-the-fact-that-exchange/" } ], "@id": "https://sms4smile.com/quotes/john-hull/our-research-led-on-to-other-things-such-as-the-fact-that-exchange/#breadcrumb" }, { "@type": "WebSite", "@id": "https://sms4smile.com/quotes/#website", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "publisher": { "@id": "https://sms4smile.com/quotes/#organization" } }, { "@type": "Organization", "@id": "https://sms4smile.com/quotes/#organization", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "logo": { "@type": "ImageObject", "url": "https://sms4smile.com/quotes/wp-content/themes/sq/assets/icons/icon-512.png", "width": 512, "height": 512 } } ] } ```