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St is the price of s non-dividend paying stock at time t. St follows a log-normal model. You are given: (i) S 0 = 40;
St is the price of s non-dividend paying stock at time t. St follows a log-normal model. You are given:
(i) S0 = 40;
(ii) The stocks continuously compounded expected growth rate is = 0.15
(iii) The stocks volatility = 0.3
Determine (
a) The average price of the stock after one year.
(b) The average price of the stock after four years.
(c)
Elln (d)En 94 Elln (d)En 94Step by Step Solution
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