Si (V) (H) (vii) Write the equation for the stock price process defining all parameters. Given that the variable x follows It's process, write down the differential equation for x, defining all items therein. Given that G is a function of x and t, write down It's lemma for G. Given that G In S, use It's lemma to show that dG = (4-0) at dt + odz 2 (iix) Which process is this? (ix) Use (vii) and (iix) to identify (a) the distribution, mean and variance of In Sr. - InS, over [O, T] (b) as in (a) but for In ST (X) Given the following: Stock with S = $40 Expected return = 16% per annum Volatility Calculate: = 20% per annum (a) Mean of In St. in 6 months time (b) Variance of In S, in 6 months time (c) 95% Coefficient Interval for In St. in 6 months time (d) Hence 95% Confidence Interval for S, in 6 months time