... correct formula has an extra term, namely,df B t = f0B t dB t+12f00Bt dt|zdB t dB t:This is Itˆo’s formula in differential form. Integrating this, we obtain Itˆo’s formula ... 15. Itˆo’s Formula 169We letjjjj!0to obtainf B T , f B 0 =ZT0B u dB u+12hBiT| z T=ZT0f0B u dB u+12ZT0f00B u| z 1du:This is Itˆo’s formula ... in freshman calculus.For paper and pencil computations, the more convenient form of Itˆo’s rule is Itˆo’s formula in differ-ential form:df B t = f0B t dB t+12f00B t dt:There...