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Problem 4(10pt). You are given the following 13 weekly observations on the price of 3M Company shares. Assuming that the stock follows the lognormal model
Problem 4(10pt). You are given the following 13 weekly observations on the price of 3M Company shares. Assuming that the stock follows the lognormal model ln(St/S0)N(t,2t) estimate and using this data. Suppose that =0 and there are 52 weeks in a year. Compute an estimate for the continuously compounded rate of return on the expected value of the stock i.e. an estimate for . Problem 4(10pt). You are given the following 13 weekly observations on the price of 3M Company shares. Assuming that the stock follows the lognormal model ln(St/S0)N(t,2t) estimate and using this data. Suppose that =0 and there are 52 weeks in a year. Compute an estimate for the continuously compounded rate of return on the expected value of the stock i.e. an estimate for
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