Consider a security with the stock prices S (1) = 80 (probability 0.125) = 90 (probability 0.25)
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Question:
Consider a security with the stock prices
S (1) = 80 (probability 0.125)
= 90 (probability 0.25)
= 100 (probability 0.375)
= 110 (probability 0.25)
(a) What is the current price of the stock for which the expected return would be 12%?
(b) What is the current price of the stock for which the standard deviation would be 18%
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