Given the Following Ito Process for a Stock $d S _ { t } = 0.2 S _ { t } d t + 0.4 S _ { t } d W$

question 9

Multiple Choice

Given the following Ito process for a stock: $d S _ { t } = 0.2 S _ { t } d t + 0.4 S _ { t } d W$ , what is the expected value of the stock after 3 years if the current price of the stock is $50?

• A) $71.67
• B) $86.40
• C) $91.11
• D) $115.82

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Definitions:

Support Activities

Business activities that do not add value directly to a firm’s product or service under consideration but support the primary activities that do add value.

Add Value

To add value means to enhance or increase the worth of a product or service through additional features, improved quality, or enhancement of some form.

Differentiation

The process of making a product, service, or business model stand out from competitors, often through unique features, quality, or branding.

Innovation

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.