Question: The figure below represents different possible values of the future price per share (P) of a companys stock. - ___________________________________________________________________ + P P* t P*

The figure below represents different possible values of the future price per share (P) of a companys stock.

- ___________________________________________________________________ +

P P*_t

P*_t represents the current (todays) price per share. Assuming the vertical distance represents the probability of various small ranges of P. ( a) Draw (on your answer sheet) a normal distribution for these different probabilities. (b) Explain where you put the mean of your distribution why did you choose that point?

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