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2. The price of a stock is $60. In one year from today the stock price is unknown. Assume the future stock price is going
2. The price of a stock is $60. In one year from today the stock price is unknown. Assume the future stock price is going to be according to the following distribution (the stock will not distribute any dividends) Probability 10% 20% 45% 20% 5% Future stock rice 50 60 65 70 80 Calculate the stock return for each of the scenarios Calculate the stock Expected Return. The formula is the same as in Q.1 section a. However, now we apply it to returns (noted by r in the formula here), rather than cash flows (noted by x in the formula of Q.1) a. b. i-1 c. Calculate the stock Standard Deviation of Return. i-l d. Calculate the dollar expected profit
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