Question

You own one share of a stock. The price is 10. The stock price changes according to a geometric Brownian motion process, with time measured in months and coefficients µ=.1 σ= 2. Calculate the probabil...

You own one share of a stock. The price is 10. The stock price changes according to a geometric Brownian motion process, with time measured in months and coefficients µ=.1 σ= 2. Calculate the probability that:

a. The stock price is at least 20 in one year.

b. The stock reaches the price of 20 before it drops to 5.

c. You will be able to sell the stock at 20 in a year if the price at the end of the first month is 7.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

E ak12 elz 2.ckau) The Stocte veaches te prvice dYops o 5 악 20 be fine ito.q79 31-0-15334 ube oable to sell the Stoclc t 2o ina e 20-1 2L1 1ー097431

Add a comment
Know the answer?
Add Answer to:
You own one share of a stock. The price is 10. The stock price changes according to a geometric Brownian motion process, with time measured in months and coefficients µ=.1 σ= 2. Calculate the probabil...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Please show work. 1. If stock price S200 falls to S197 on the ex-dividend date only...

    Please show work. 1. If stock price S200 falls to S197 on the ex-dividend date only because of the cash dividend, what is the dividend amount paid per share? (Hint: In this case, the value of stock falls only because the firm pays cash to the shareholders.) 1) S1 2) S3 3) SS 4) S7 5) S8 2. Dow Jones Industrial Average Index was 12,632.91 on Jan 01, 2012 and 20,068.51 on Jan 01, 2017. You compute 20,068/12,632-1-58.87%. If you...

  • Please use own words. Thank you. CASE QUESTIONS AND DISCUSSION > Analyze and discuss the questions...

    Please use own words. Thank you. CASE QUESTIONS AND DISCUSSION > Analyze and discuss the questions listed below in specific detail. A minimum of 4 pages is required; ensure that you answer all questions completely Case Questions Who are the main players (name and position)? What business (es) and industry or industries is the company in? What are the issues and problems facing the company? (Sort them by importance and urgency.) What are the characteristics of the environment in which...

  • Read the Article posted below, then answer the following questions: Mergers & acquisitions are a major...

    Read the Article posted below, then answer the following questions: Mergers & acquisitions are a major form of corporate diversification strategy, identify and discuss the top three reasons why most (50-60%) of acquisitions fail to create shareholder value. What are the five major components of “CEMEX Way” and why has this approach been so successful in post-acquisition integration? In your opinion, what can other companies learn from the “CEMEX Way” as a benchmark for acquisition management? Article: CEMEX: Globalization "The...

  • Is there one universal way for a MNC to motivate its employees around the world to...

    Is there one universal way for a MNC to motivate its employees around the world to exert maximum effort and be accountable for their results? case: Global Talent Management at Novartis I do not know how to give you the whole case Sourcing Talent Globally The company was actively involved in sourcing talent from increasingly dispersed locations. Managers were encouraged to keep an updated list of leadership talent. In addition, the company 7 708-486 Global Talent Management at Novartis had...

  • Please read the article and answer about questions. You and the Law Business and law are...

    Please read the article and answer about questions. You and the Law Business and law are inseparable. For B-Money, the two predictably merged when he was negotiat- ing a deal for his tracks. At other times, the merger is unpredictable, like when your business faces an unexpected auto accident, product recall, or government regulation change. In either type of situation, when business owners know the law, they can better protect themselves and sometimes even avoid the problems completely. This chapter...

  • How did Samsung overtake Panasonic and Philips? What core competencies (resources and capabilities) did the firm...

    How did Samsung overtake Panasonic and Philips? What core competencies (resources and capabilities) did the firm possess that helped it to be successful? (Discuss the international strategy that Samsung executed.) Samsung Leadership Era: 2000–Present Samsung group was founded in 1938 by Byung-Chull Lee as a simple trading company in Taegu, Korea that exported basic goods such as dried fish, vegetables, and fruit before expanding into several business lines, including insurance, securities, and retail.43 In 1969, Lee decided to enter the...

  • How can we assess whether a project is a success or a failure? This case presents...

    How can we assess whether a project is a success or a failure? This case presents two phases of a large business transformation project involving the implementation of an ERP system with the aim of creating an integrated company. The case illustrates some of the challenges associated with integration. It also presents the obstacles facing companies that undertake projects involving large information technology projects. Bombardier and Its Environment Joseph-Armand Bombardier was 15 years old when he built his first snowmobile...

  • SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the...

    SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the company's new line of single-serve coffee pods or to await results from the product's launch in the United States. Key strategic decisions include choosing the target market to focus on and determining the value proposition to emphasize. Important questions are also raised in regard to how the new product should be branded, the flavors to offer, whether Kraft should use traditional distribution channels or...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT