A stock now sells at a price of $25 per share. The distribution of the price...
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A stock now sells at a price of $25 per share. The distribution of the price of the stock one year from now is believed to be as follows: 24,000 f(x) = x4 x 2 20 a) What is the probability that the stock price will exceed $25 per share one year from now? b) Find the mean and median of this distribution. c) Find the 87.5 percentile of this distribution. d) Let W = X - 25 IF X2 25 = 0 IF X < 25 Compute E(W). What is the financial interpretation of W? A stock now sells at a price of $25 per share. The distribution of the price of the stock one year from now is believed to be as follows: 24,000 f(x) = x4 x 2 20 a) What is the probability that the stock price will exceed $25 per share one year from now? b) Find the mean and median of this distribution. c) Find the 87.5 percentile of this distribution. d) Let W = X - 25 IF X2 25 = 0 IF X < 25 Compute E(W). What is the financial interpretation of W?
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