Suppose the stock price (St)ostsT during a period [0, T] is given by St = So exp (ut + OBt), (5) where (BoostsT is a Brownian motion. (i) Using the fact that Bt ~ N(0, t) and the MGF of normal RV, show that E[exp (ut + 0 B+)] = exp((1 + 0212) t). (6) (ii) Using (i), show that the discounted stock price e "S, forms a martingale if and only if r = 02 2 (7)