A Stock Is Valued at $28

question 18

Multiple Choice

A stock is valued at $28.00.The annual expected return is 9.0% and the standard deviation of annualized returns is 19.0%.If the stock is lognormally distributed,what is the expected price after 4 years?

• A) $28.00
• B) $32.33
• C) $40.13
• D) $54.60

---

Definitions:

Portion

A part or segment of the whole, often expressed as a fraction or percentage.

Accurate

Describes information, measurements, or results that are exact, precise, and free from errors or mistakes.

Cent

A monetary unit equal to one hundredth of a larger unit, such as a dollar or euro.

Milligrams

A unit of mass equal to one thousandth of a gram, used primarily to measure small quantities of material.