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The following are the monthly lognormal returns for a dividend-paying stock: Month 1 IN 2 3 Return -0.082 -0.143 0.222 0.025 0.033 0.035 4 5

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The following are the monthly lognormal returns for a dividend-paying stock: Month 1 IN 2 3 Return -0.082 -0.143 0.222 0.025 0.033 0.035 4 5 6 (i) Estimate the stocks expected rate of appreciation per annum. You should use the assumption that the sample mean of return is not 0. (ii) If the current stock price is 40, estimate the expected payoff for an at-the-money European put option on the stock that expires in six months. The following are the monthly lognormal returns for a dividend-paying stock: Month 1 IN 2 3 Return -0.082 -0.143 0.222 0.025 0.033 0.035 4 5 6 (i) Estimate the stocks expected rate of appreciation per annum. You should use the assumption that the sample mean of return is not 0. (ii) If the current stock price is 40, estimate the expected payoff for an at-the-money European put option on the stock that expires in six months

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