65.11. THE QUADRATIC VARIATION OF THE STOCHASTIC INTEGRAL 2259

Lemma 65.11.2 Let Φ,Φn all be in L2([0,T ] ,L2

(Q1/2U,H

))off some set of measure

zero. These are all progressively measurable. Thus there are all stochastically squareintegrable.

P(∫ T

0∥Φ∥2 ds

)= 1

Suppose also that for each ω /∈ N, the exceptional set,∫ T

0∥Φn−Φ∥2

L2dt→ 0

Then there exists a set of measure zero, still denoted as N and a subsequence, still denotedas n such that for each ω /∈ N,

limn→∞

∫ T

0ΦndW =

∫ T

0ΦdW

Proof: Define stopping times

τnp ≡ inf{

t ∈ [0,T ] :∫ t

0∥Φn∥2 ds > p

}Let τ p be similar but defined with reference to Φ. Then by Ito isometry,

E

(∣∣∣∣∫ T

0X[0,τnp]ΦndW −

∫ T

0X[0,τ p]ΦdW

∣∣∣∣2)

= E(∫ T

0

∥∥∥X[0,τnp]Φn−X[0,τ p]Φ∥∥∥2

L2dt)

(65.11.19)

The integrand in the right side is bounded by 2p2. Also this integrand converges to 0 foreach ω as n→ ∞. This is shown next.∫ T

0

∥∥∥X[0,τnp]Φn−X[0,τ p]Φ∥∥∥2

L2dt

≤ 2∫ T

0

(∥∥∥X[0,τnp]Φn−X[0,τnp]Φ∥∥∥2

L2+∥∥∥X[0,τnp]Φ−X[0,τ p]Φ

∥∥∥2

L2

)dt

≤ 2∫ T

0∥Φn−Φ∥2

L2dt +2

∫ T

0

∣∣∣X[0,τnp] (t)−X[0,τ p] (t)∣∣∣2 ∥Φ∥2

L2dt

The first converges to 0 by assumption. Problem is, it does not look like this second integralconverges to 0. We do know that

∫ t0 ∥Φn∥2 ds→

∫ t0 ∥Φ∥

2 ds uniformly so τnp→ τ p is likely.However, this does not imply X[0,τnp]→X[0,τ p]. However, it would converge in L2 (0,T )and so there is a subsequence such that convergence takes place a.e. t. Then restrictingto this subsequence, the second integral converges to 0. Actually, it may be easier thanthis. X[0,τ p] has a single point of discontinuity and convergence takes place at every otherpoint. Thus it appears that the integrand in 65.11.19 converges to 0 for each ω . Thus, bydominated convergence theorem the whole expectation converges to 0.

65.11. THE QUADRATIC VARIATION OF THE STOCHASTIC INTEGRAL 2259Lemma 65.11.2 Let ®,®,, all be in L? ({0, T|,2 (0'/?U,H)) off some set of measurezero. These are all progressively measurable. Thus there are all stochastically squareintegrable.T(| ]e|Pas) =10Suppose also that for each @ ¢ N, the exceptional set,T 2[ ]®, — P|, dr > 0Then there exists a set of measure zero, still denoted as N and a subsequence, still denotedas n such that for each o ¢ N,T Tlim | &, dW = | dW0 0n—s00Proof: Define stopping timestfap Sint {tr € [0,7]: | en [Pas > p}0Let T, be similar but defined with reference to &. Then by Ito isometry,)2ar) (65.11.19)LyT Te(| [ Dp) Pol — [| Dio) PAW~ (I | Zoeu]®— 2ion1®|The integrand in the right side is bounded by 2p”. Also this integrand converges to 0 foreach @ as n — co. This is shown next." 2[ iecui™~Fesa%l.atl i?2) dtLyT T 22 2<2 |e, of%, 442 [| 2o.,,)0— Zon] Ol Ils atThe first converges to 0 by assumption. Problem is, it does not look like this second integralconverges to 0. We do know that ff ||®,||? ds > fi ||®||? ds uniformly so Tp) —> Tp is likely.However, this does not imply Kio, tnp| —> Kio, tp)" However, it would converge in L? (0,7)0,tnp|® ~ A iotyand so there is a subsequence such that convergence takes place a.e. ft. Then restrictingto this subsequence, the second integral converges to 0. Actually, it may be easier thanthis. Zo, 1] has a single point of discontinuity and convergence takes place at every otherpoint. Thus it appears that the integrand in 65.11.19 converges to 0 for each @. Thus, bydominated convergence theorem the whole expectation converges to 0.