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4. From historical returns data on Lotus, we know its mean is 19% and volatility is 50% per year. Assume Lotus stock prices follow the

4. From historical returns data on Lotus, we know its mean is 19% and volatility is 50% per year. Assume Lotus stock prices follow the lognormal distribution or the geometric Brownian motion, and its current price is $17.50.

a) What is the 68% confidence interval of the stock price in one month?

b) What is the 95% confidence interval of the stock price in one month?

c) What is the 99.7% confidence interval of the stock price in one month?

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