ABSTRACT
Traditional applications ofdifsion processes for stochastic modeling can be found in [10]. Some recent applications to mathematical finance, forest management, and market policy involving modeling by difsion-type processes are discussed in [14] with main emphasis on the statistical inference for such model s. Numerical approximation methods for simulation of stochastic differential equations are also discussed in [14]. We are not giving the applications of techniques ofcounting processes to survival analysis and reliability, as there are books covering these areas extensively (cf. [1, 4, 11]). We will now discuss a couple of applications involving stochastic modeling through semimartingales.
