Question: 3.The student had modeled the stock price changes using Brownian motion.The next day, unexpected news about the stock caused the price to jump.A jump means

3.The student had modeled the stock price changes using Brownian motion.The next day, unexpected news about the stock caused the price to jump.A jump means that the next price skipped some of the prices in between the previous price.(10% of total points)

3.a) Is the student's assumption about Brownian motion still valid?If not, why not?

3.b)Does your answer matter if the price jumped up or down?

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