Question
Consider a stock with S0 = 90, = .06, = .2. Use our continuous Black-Scholes model to answer the following. (a) What is the probability
Consider a stock with S0 = 90, = .06, = .2. Use our continuous Black-Scholes model to answer the following.
(a) What is the probability that the stock ends up below 80 after 1 year?
(b) What is the probability that stock ends up above 110 after 2 years?
(c) What is the expected value of the price of the stock after 1 year?
(d) What is the expected compound rate of return for an investor buying this stock?
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Financial Management For Nurse Managers
Authors: J. Michael Leger
5th Edition
1284230937, 9781284230932
