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    Exam 13: Implementing the Binomial Model
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    Suppose the Returns on a Stock Are Lognormally Distributed With \mu
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Suppose the Returns on a Stock Are Lognormally Distributed With \mu

Question 4

Question 4

Multiple Choice

Suppose the returns on a stock are lognormally distributed with μ=0\mu = 0μ=0 and σ=0.2\sigma = 0.2σ=0.2 .The expected three-month simple returns on the stock are


A) 0.
B) 0.25%
C) 0.50%
D) 1.01%

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