he previous section hints that we are going to work with ratios of stochastic
processes. We will repeatedly perform the
(
Ito_formula
)based evaluation
of
and
Hence,


(Useful formula)

Suppose the stochastic processes
and
are given by the
SDEs
where the
and
are columns. In terms of the SDE's coefficients we
obtain
Note, if
is a Brownian motion in a
numeraire
measure then the above drift is zero
and
It is informative to compare the last relationship with the
(
Market prices of risk
).
