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Probability distribution for the stock price

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A stock price is currently $50. Assume that the expected return from the stock is 18% and its volatility is 30%. What is the probability distribution for the stock price in 2 years? Calculate the mean and standard deviation distribution. Determine the 95% confidence interval.

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Solution Summary

The solution illustrates the method of determination of the probability distribution for the stock price and its mean and standard deviation.

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