From historical returns data on Lotus, we know its mean is 19% and volatility is 50% per year. Assume Lotus stock prices follow the lognormal distribution or the geometric Brownian motion, and its current price is $17.50.
a) What is the 68% confidence interval of the stock price in one month?
b) What is the 95% confidence interval of the stock price in one month?
c) What is the 99.7% confidence interval of the stock price in one month?
