From historical returns data on Lotus, we know its mean is 19% and volatility is 50% per

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From historical returns data on Lotus, we know its mean is 19% and volatility is 50% per year. Assume Lotus stock prices follow the lognormal distribution or the geometric Brownian motion, and its current price is $17.50.

a) What is the 68% confidence interval of the stock price in one month?

b) What is the 95% confidence interval of the stock price in one month?

c) What is the 99.7% confidence interval of the stock price in one month?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Apr 16, 2024 06:02 AM

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From historical returns data on Lotus, we know its mean is 19% and volatility is 50% per

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To calculate the confidence intervals of the stock price in one month we can use the lognormal distr... View the full answer

Income Tax Fundamentals 2013

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