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5. Suppose that a stock is currently valued at So-100 and has annual volatility of 0-15%. Going forward, you predict that volatility in one year

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5. Suppose that a stock is currently valued at So-100 and has annual volatility of 0-15%. Going forward, you predict that volatility in one year from today will be -o" > 0 with probability p, or i d 0 with probability p, or i d

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