Suppose the Returns on a Stock Are Lognormally Distributed With \mu

question 9

Multiple Choice

Suppose the returns on a stock are lognormally distributed with $\mu = 0$ and $\sigma = 0.2$ . 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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Definitions:

Myopia

A common vision condition also known as nearsightedness, where distant objects appear blurry while close ones can be seen clearly.

Hyperopia

A vision condition, also known as farsightedness, where distant objects can be seen more clearly than near objects due to the eye's focus being behind the retina.

Farsightedness

A common vision condition, also known as hyperopia, where distant objects can be seen clearly, but close ones do not come into proper focus.

Math Book

A textbook focused on the study and application of mathematics, covering various topics from basic arithmetic to advanced calculus.