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Suppose that Tesla's tock price, St, is determined by the process: dLt = mdt + odBt where Lt = log(St), m= 12%, o = 48%
Suppose that Tesla's tock price, St, is determined by the process: dLt = mdt + odBt where Lt = log(St), m= 12%, o = 48% and time is measured in years. Suppose So = $700. (a) (4 points) What is the expected log return of Tesla stock over three months? (b) (14 points) What is P(S3 months > $770)? Suppose that Tesla's tock price, St, is determined by the process: dLt = mdt + odBt where Lt = log(St), m= 12%, o = 48% and time is measured in years. Suppose So = $700. (a) (4 points) What is the expected log return of Tesla stock over three months? (b) (14 points) What is P(S3 months > $770)
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