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What is the current price of the stock

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Reference no: EM132516478

Consider a security with the stock prices S(1) = : 80 with probability 1/8 90 with probability 2/8

100 with probability 3/8

110 with probability 2/8

(a) What is the current price of the stock for which the expected return would be 12%?

(b) What is the current price of the stock for which the standard deviation would be 18%?

Reference no: EM132516478

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