Question: Repeat Exercise 5.46. letting x equal the number of stocks that decline on the particular day. In exercise 5.46 a. Write the probability distribution of
Repeat Exercise 5.46. letting x equal the number of stocks that decline on the particular day.
In exercise 5.46
a. Write the probability distribution of x assuming that all outcomes are equally likely.
b. Write the probability distribution of .v assuming that for each stock P(R) = .6,
P(U) = .1, and P(D) = .3 and assuming that movements of the two stocks are independent.
c. Write the probability distribution of x assuming that for the first stock
P(R) = .4, P(U) = .2, P(D) = .4and that for the second stock
P(R) = .8, P(U) = .1, P(D) = .1
and assuming that movements of the two stocks are independent.
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