Suppose that the change in stock price is described

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1. Suppose that the change in stock price is described by an It process such that

The stock pays no dividend and has a volatility of 60% per annum and a continuously compounded return of 21%. Can you forecast the stock price in 10 days? Assume that the stock is currently selling for $48.27.

2. How does the natural logarithm of the stock price fit into the data as in (1)?

Reference no: EM131337222

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