11.6 Example of a Discrete Time Continuous variable model A stock price is currently at $40 At the end of 1 year it is considered that it will have a probability distribution of o (40, 10) Whereψ(μ,o) is a normal distribution with mean u and standard deviationσ. Options, Futures, and Other Derivatives, 5th edition C 2002 by John C Hull11.6 Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull Example of a Discrete Time Continuous Variable Model • A stock price is currently at $40 • At the end of 1 year it is considered that it will have a probability distribution of f(40,10) where f(m,s) is a normal distribution with mean m and standard deviation s