= Suppose that (log) stock prices evolve according to pt = u + Pt-1 + et. (i) Show that this model also implies that Eu + Pt = po + ut + Ei=1Cj. (ii) Assuming that the e's are independently and normally distributed with mean 0 and variance o obtain E[pt] and V[pt]. (iii) What is the distribution of pt, characterise its mean and variance. j e = Suppose that (log) stock prices evolve according to pt = u + Pt-1 + et. (i) Show that this model also implies that Eu + Pt = po + ut + Ei=1Cj. (ii) Assuming that the e's are independently and normally distributed with mean 0 and variance o obtain E[pt] and V[pt]. (iii) What is the distribution of pt, characterise its mean and variance. j e