Question: Question 3 (20 points) The S&P 500 index current level is 3,000. The dividend yield on the index is equal to the risk- free rate

 Question 3 (20 points) The S&P 500 index current level is

Question 3 (20 points) The S&P 500 index current level is 3,000. The dividend yield on the index is equal to the risk- free rate of interest. Given a volatility of the index of 25%: a) Compute the probability that the index value in 6 months is greater than 3,300. b) Compute the probability that the index value in 6 months is less than 2700. c) Compute the probability that the index value in 6 months is between 2700 and 3300

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