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(1) Lognormal model. In the lognormal model, what are the expected value, variance, and probability density function of S(T) given S(0)? In other words, if find E[S(T)], var :(S(T)), and the probability density function of S(T). Hint: Recall that if Y is a lognormal random variable with parameters u and o, i.e., with then E|Y] = euto and the probability density function of Y is (1) if y < 0.

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