Suppose that the price of a share verifies that (mu=16 %) and the volatility is (30 %).

Question:

Suppose that the price of a share verifies that $\mu=16 \%$ and the volatility is $30 \%$. If the closing price of the share at a given day is $\$ 50$, compute:

(a) The closing expected value of the share for the next day

(b) The standard deviation of the closing price of the share for the next day

(c) A $95 \%$ confidence interval for the closing price of the share for the next day

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Quantitative Finance

ISBN: 9781118629956

1st Edition

Authors: Maria Cristina Mariani, Ionut Florescu

See More Books

Question Posted: Apr 20, 2024 05:57 AM

See More Questions

13. What is a lower bound for the price of 3-month call option on a non- dividend-paying stock when the stock price is $50, the strike price is $45, and the 3-month risk-free interest rate is 8%?...
1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job...
Perform the following exercises in which you must analyze the methods to evaluate accounts receivable, perform notes receivable exercises and define the different types of accounts receivable: Define...
The FBI Standard Survey of Crimes shows that for about 80% of all property crimes (burglary, larceny, car theft, etc.), the criminals are never found and the case is never solved (Source: True Odds,...
An auditor for the Inland Revenue is trying to reconstruct some partially destroyed records of two taxpayers. For each of the cases in the accompanying list, find the unknowns designated by letters A...
Is the function {(8,4), (1, 1), (6, 6), (7, 8), (3, 5)) one-to-one? Select Is the function {(4, 1), (8, 4), (2, 3), (7, 7), (3, 1)} one-to-one? Select
Raster Imaging Company has a new management team that has developed an operating plan to improve upon last year's ROE. The new plan would place the debt ratio at 55 percent, which will result in...
The cost of the trading securities of Cepeda Company at December 31, 2010, is $62,000. At December 31, 2010, the fair value of the securities is $59,000. Prepare the adjusting entry to record the...
Vicky was an employee during 2 0 2 3 and she received the following income and benefits from her employer: Salaries paid and received in 2 0 2 3 - $ 4 2 , 0 0 0 Bonus declared by her employer on...
American Down and Out Call. Given $K=100, T=\frac{1}{30}, S=100, \sigma=0.6, r=$ 0.01 , and $B=95$. Construct a tree for all nodes below the barrier value $=0$.
The price of a share is $\$ 40$. If $\mu=0.1$ and $\sigma^{2}=0.16$ per year, find a $95 \%$ confidence interval for the price of the share after six months (i.e. an interval...
F(x) = 2x 3 + (a + 1)x 2 ax + b When f(x) is divided by x 1, the remainder is 5. When f(x) is divided by x 2, the remainder is 14. Show that a = - 4 and find the value of b.
When a transferor contributes appreciated property to a corporation in exchange for stock in the corporation, and the transaction qualifies under Section 351, the transferor/shareholder takes what...
Does the Income Taxes topic apply to foreign entities that apply GAAP? please Explain 200 minimum words.
Recently, Monette has been monitoring GBT's inventory loan to South West Appliance Corporation. In a routine check of corporate records, Monette discovered for the first time that six months ago the...
When was ASC 606-10 first effective for a private company with a calendar year-end? b. How must the standard be initially applied (prospectively, retrospectively)? Explain. c. Were private companies...
Lots of Stuff Enterprises (LSE), Inc., is an online marketplace for pre-owned jewellery with 1 million shares of common stock outstanding. Jill Thompson, the CEO of LSE, Inc., seeks to raise $5...
The extension spring shown in the figure has full-twisted loop ends. The material is AISI 1065 OQ&T wire. The spring has 84 coils and is close-wound with a preload of 16 lbf. (a) Find the closed...
Hotel Majestic is interested in estimating fixed and variable costs so that the company can make more accurate projections of costs and profit. The hotel is in a resort area that is particularly busy...
(a) A Ltd. has issued convertible bonds, which carries a coupon rate of 14%. Each bond is convertible into 20 equity shares of the company A Ltd. The prevailing interest rate for similar credit...
(a) An investor purchased 300 units of a Mutual Fund at Rs. 12.25 per unit on 31 December, 2009. As on 31st December, 2010 he has received Rs. 1.25 as dividend and Rs. 1.00 as capital gains...
(a) The following information is given for 3 companies that are identical except for their capital structure: Orange Grape Apple Total invested capital 1,00,000 1,00,000 1,00,000 Debt/assets ratio...

Suppose that the price of a share verifies that (mu=16 %) and the volatility is (30 %).

Question:

Step by Step Answer:

Quantitative Finance

Students also viewed these Business questions