The current spot price of a stock is $50, the expected return of the stock is 7%, and the volatility of the stock is 20%. The risk-free rate is 5%. Find an 80%-condence interval for the stock price in 3 months. Also compute the expected percent change in the stock between months 0 and 6.

The current spot price of a stock is $50, the expected return of the stock is 7%, and the volatility of the stock is 20%. The risk-free rate is 5%. Find an 80%-condence interval for the stock price in 3 months. Also compute the expected percent change in the stock between months 0 and 6.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 3P

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Question

i will 10 upvotes urgent. The current spot price of a stock is $50, the expected return of the stock is 7%, and the volatility of the stock is 20%. The risk-free rate is 5%. Find an 80%-condence interval for the stock price in 3 months. Also compute the expected percent change in the stock between months 0 and 6.

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