Question: Please answer the following questions, a and b. Will thumbs it up when answered. A stock price index at time t has the distribution according

Please answer the following questions, a and b. Will thumbs it up when answered.

Please answer the following questions, a and b. Will thumbs it up

A stock price index at time t has the distribution according to the random variable Se = 75 x exp (ut + ovz) + where Z has a standard normal distribution and time is measured in years. Parameter values are j = 0.15 and 0 = 0.35 and the stock index pays a continuous dividend at the rate 8 = 0.03. You invest $3,500 in the stock index at time 0 and your dividends are immediately reinvested in the stock index over the life of your investment. (a) What is the probability that the one-year total return on your investment is less than or equal to -10%? (i.e. what is the probability that you lose at least 10% on your initial investment over the year?) (b) What is the 0.10 percentile of your one-year investment total return

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