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A stock price is currently $60. Assume that the expected return from the stock is 25% and its volatility is 35%. What is the probability

A stock price is currently $60. Assume that the expected return from the stock is 25% and its volatility is 35%. What is the probability distribution for the rate of return (with continuous compounding) earned over a four-year period?

  1. (0.28875, 0.040625)

  2. (0.18875, 0.030625)

  3. (0.49975, 0.040665)

  4. (0.12895, 0.020956)

  5. None of the above

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