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1 Suppose a stock price is lognormal with drift and volatility , in other words S(t)= s(0)et+W(t). Given K>0, let PK be the probability that
1 Suppose a stock price is lognormal with drift and volatility , in other words S(t)= s(0)et+W(t). Given K>0, let PK be the probability that S(T)K. (a) Express PK as the value of a particular integral. (b) Give an expression for PK in terms of the cumulative normal distribution N()
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