The current stock price of BHP Group is $38. Assume that BHP has an expected return of

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The current stock price of BHP Group is $38. Assume that BHP has an expected return of 15% per annum and a volatility of 20% per annum.

a) What is the probability distribution for the rate of return over a one-year period with continuous compounding ?

b) What is the probability that a European call option on BHP with an exercise price of $41 and a maturity date in 4 months will not be exercised?

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Contemporary Engineering Economics

ISBN: 978-0136118480

5th edition

Authors: Chan S. Park

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Posted Date: Mar 08, 2024 08:19 AM

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The current stock price of BHP Group is $38. Assume that BHP has an expected return of

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Contemporary Engineering Economics

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