Question
Consider a security with the stock prices S(1) = : 80 with probability 1/8 90 with probability 2/8 100 with probability 3/8 110 with probability
Consider a security with the stock prices
S(1) =
:
80 with probability 1/8
90 with probability 2/8
100 with probability 3/8
110 with probability 2/8
(a) What is the current price of the stock for which the expected return
would be 12%?
(b) What is the current price of the stock for which the standard deviation
would be 18%?
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Financial Modeling
Authors: Simon Benninga, Tal Mofkadi
5th Edition
0262046423, 9780253337825
