6. Suppose that the current stock price is 100 $. Its annualized volatility is 25 % and return 15% i.e. we assume that the stock price follows the process dXt = 0.15 Xt dt+0.25 Xt dWt. Writethe probability density function for the stock in l year and 2 years.

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Answered: 5. Suppose that the current stock price…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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5. Suppose that the current stock price is 100 $. Its annualized volatility is 25 % and return 15 % i.e. we assume that the stock price follows the process dXt = 0.15 Xt dt+0.25 Xt dWt. Write he probability density function for the stock in 1 year and 2 years.