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1.GM stock currently trades at $15. Risk-free rate is 1%. Consider the following probability space...

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Finance

1.GM stock currently trades at $15. Risk-free rate is 1%. Consider the following probability space with the corresponding price for GM stock:

Scenario: Probability: GM price:

Life is good 0.6 $14

Ouch! 0.4 $6

What's the expected return for GM stock?

2.

GM stock currently trades at $15. Consider the following probability space with the corresponding price for GM stock:

Scenario: Probability: GM price:

Life is good 0.6 $14

Ouch! 0.4 $6

What's the expected volatility for GM stock?

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