mean rate return stock estimated 20 while volatility 40 risk free interest rate 5 what mean

 The mean rate of return on a stock is estimated at 20%  while the volatility

is 40%:  The risk free interest rate is 5%:

 (a) What is the mean for the log price relative?

(b) Construct the .nal stock prices for a 10  period one year tree.

(c) Construct the statistical probabilities for these stock prices

(d) Construct the associated risk neutral probabilities.