The current price of a non-dividend-paying stock is $100. The volatility of the stock price is 20%, and the risk-free interest rate is 5% for all maturities. Using the Black-Scholes pricing model, estimate todays probabilities that the stock price in six months will be (a) less than or equal to $90, (b) between $90 and $110, and (c) greater than $110.

Problem 8 The current price of a non-dividend-paying stock is $100. The volatility of the stock price is 20%, and the risk-free interest rate is 5% for all maturities. Using the Black-Scholes pricing model, estimate today's probabilities that the stock price in six months will be (a) less than or equal to 890, (b) between S90 and S110, and (c) greater than S110. Problem 8 The current price of a non-dividend-paying stock is $100. The volatility of the stock price is 20%, and the risk-free interest rate is 5% for all maturities. Using the Black-Scholes pricing model, estimate today's probabilities that the stock price in six months will be (a) less than or equal to 890, (b) between S90 and S110, and (c) greater than S110