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Exercise 2 Let Sk denote the price of a given stock on the kth day (k > 1) and suppose that k+1 Sk+1 = Sx

Exercise 2 Let Sk denote the price of a given stock on the kth day (k > 1) and suppose that k+1 Sk+1 = Sx + Xk+1 = So + Xi, i=1 where X1, X2, ... are i.i.d. with common distribution function F. Assume X1, X2, ... are independent on So (the initial price), and the mean E[X1] := Mp bn and not exercise if s

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