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Let a stock price follow a Geometric Brownian Motion dS = 0.1Sdt +0.22SdW(t) 1. (10 points) If the stock is at So = 180 today,

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Let a stock price follow a Geometric Brownian Motion dS = 0.1Sdt +0.22SdW(t) 1. (10 points) If the stock is at So = 180 today, what is the probability that in 2 years it will be in the range [220; 235] 2. (10 points) You are given the option of putting 180 into a bank account that pays 6% annual interest, continuously compounded, or buying 1 share in the stock. In 2 years, wha is the probability that the investment in the stock outperforms the bank account, i.e. has higher returns? Let a stock price follow a Geometric Brownian Motion dS = 0.1Sdt +0.22SdW(t) 1. (10 points) If the stock is at So = 180 today, what is the probability that in 2 years it will be in the range [220; 235] 2. (10 points) You are given the option of putting 180 into a bank account that pays 6% annual interest, continuously compounded, or buying 1 share in the stock. In 2 years, wha is the probability that the investment in the stock outperforms the bank account, i.e. has higher returns

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