Question: The logarithmic return for a stock is normal with an annualized mean of 12% and an annualized standard deviation of 50%. [5pts] Assume you were

The logarithmic return for a stock is normal with an annualized mean of 12% and an annualized standard deviation of 50%. [5pts] Assume you were thinking of buying the stock. What is the probability that in six months time you will lose money? Show each step of your calculation. 5pts] If the analysis took place in a risk neutral economy, what would be the estimated probability of losing money? Show each step of your calculation.

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