09. You are doing research on a biotech firm. You think there are three scenarios for the drug depending on the results from the clinical trials: i. Not effective; ii. Effective; iii. Super effective with probabilities of i 30%; ii. 40%; iii. 30% respectively. You believe the stock with be worth under those scenarios eventually. i. $50; ii. S100; iii. $150 Q9a. What is the STDEV today? (3 points) Q9b. A preliminary trial was NOT very promising, which eliminates the chance of iii (ie "super effective"). What is the stock price reaction (what is the new price) upon the release of the trial result? (3 points) Q9c. What is the price of a PUT option with strike of 100 BEFORE and AFTER the news release? (4 points) Q10. A trading desk trades a strategy with 2% mean return and 10% stdev PER day. a. What is the 1% daily VaR in $ term, if the desk has $100M of trading capital (5 points)