Assume the Black Scholes Merton framework You are given the fol lowing information for a stock that pays dividends continuously at a rate proportional to its price (a) The current stock price is 0 25 (b) The stocks volatility is 0 35 (c) The continuously compounded expected rate of stock price appre ciation is 15 Calculate the upper limit of the 90 lognormal confidence interval for the price of the stock in 6 months (Hint N 1 (0 95) 1 64485) Assume the Black Scholes Merton framework You are given the fol lowing information for a stock that pays dividends continuously at a rate proportional to its price (a) The current stock price is 0 25 (b) The stocks volatility is 0 35 (C) The continuously compounded expected rate of stock price appre ciation is 15 Calculate the upper limit of the 90 lognormal confidence interval for the price of the stock in 6 months (Hint N 1(0 95) 1 64485)

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Assume the Black-Scholes-Merton framework. You are given the fol- lowing information for a stock that pays dividends continuously at a rate proportional to its price.

Assume the Black-Scholes-Merton framework. You are given the fol- lowing information for a stock that pays dividends continuously at a rate proportional to its price. (a) The current stock price is 0.25. (b) The stocks volatility is 0.35. (c) The continuously compounded expected rate of stock-price appre- ciation is 15%. Calculate the upper limit of the 90% lognormal confidence interval for the price of the stock in 6 months. (Hint: N 1 (0.95) = 1.64485) image text in transcribed

Assume the Black-Scholes-Merton framework. You are given the fol- lowing information for a stock that pays dividends continuously at a rate proportional to its price. (a) The current stock price is 0.25. (b) The stocks volatility is 0.35. (C) The continuously compounded expected rate of stock-price appre- ciation is 15%. Calculate the upper limit of the 90% lognormal confidence interval for the price of the stock in 6 months. (Hint: N-1(0.95) = 1.64485)