Question: 5.A stock price has an expected return 12% per year and volatility of 25% per year. Currently the stock price is $40. Assume 252 days

5.A stock price has an expected return 12% per year and volatility of 25% per year. Currently the stock price is $40. Assume 252 days per year.

a) What is the expected stock price? b) What is the width of the 95% confidence interval forth stock price at the end of one day? c) Suppose there is excess kurtosis of 10. What would this do to the confidence interval? Provide 2 arguments.

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