Mini Case $1\mathrm{.}2.$

Consider a value process $W_t$ that follows a Random Walk with drift, i$.$e$.,\frac{W}{W}=$

$H+\sqrt[\phantom{2}]{H}Z,ZN(0,1),$ where $=5\%$ p$.$a$.,=15\%$ p$.$a$.,$ and $W_t=150.$

What is the expected return and volatility for a time period of $8$ years?

Consider a realization of $Z$ equal to $-1\mathrm{.}6449.$ What is the return of $W$ in $8$

years?

What is the $8$ year $0\mathrm{.}1\%$ VaR?