Question
The daily log return on a stock are independent and Normally distributed with mean 0.1 and standard deviation 0.2. Suppose you to buy 300 euro
The daily log return on a stock are independent and Normally distributed with mean 0.1 and standard deviation 0.2. Suppose you to buy 300 euro of this stock.
What is the mean of the distribution of the prices after one trading week?
(The answer is 695 but I don't understand why)
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An Introduction to the Mathematics of financial Derivatives
Authors: Salih N. Neftci
2nd Edition
978-0125153928, 9780080478647, 125153929, 978-0123846822
