Assuming the log-normal price for a stock Verify the formula ST = Ste°√T-tZ+(µ−3 )(T−t)¸ SD(ST) = SoeT √eo²T. 1

Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter4: Calculating The Derivative
Section4.5: Derivatives Of Logarithmic Functions
Problem 45E
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Assuming the log-normal price for a stock
Verify the formula
ST = Ste°√T-tZ+(µ−3²)(T−t)¸
SoeHT √e²T - 1
SD(ST) = SoeHT,
Transcribed Image Text:Assuming the log-normal price for a stock Verify the formula ST = Ste°√T-tZ+(µ−3²)(T−t)¸ SoeHT √e²T - 1 SD(ST) = SoeHT,
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