medium · Quantitative Finance
A stock follows Geometric Brownian Motion with a real-world expected return μ = 12% and volatility σ = 20%.
According to the lognormal property, what is the expected stock price at time T = 1 year if the initial price S_0 = 100?
- $120.00
- $112.75
- $112.00
- $110.52
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