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Show all work so I can learn. Thanks! Assume the Black-Scholes framework. You are given: S(t) is the stock price at time t. The stocks

Show all work so I can learn. Thanks!

Assume the Black-Scholes framework. You are given:

  1. S(t) is the stock price at time t.
  2. The stocks volatility is 25%.
  3. The continuously compounded expected rate of return is 8%.
  4. The stock pays dividends continuously at a rate of 3% proportional to its price.
  5. The continuously compounded risk-free interest rate is 4%.
  6. The current stock price is S(0)=125.

Determine the probability that S(10) is less than its median.

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