Text: Amazon stock provides an expected return of 11.05% per year, calculated by a CAPM model, and has an implied volatility of 34.5% per year. The expected value of the continuously compounded return for Amazon in one year is closest to: a) 17.25% b) 11.0% c) 5.01% d) 45.5%
Added by Melanie G.
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05%, we can calculate the continuously compounded return as: \[ \text{Continuously Compounded Return} = \ln(1 + 0.1105) \] Show more…
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