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1 1 . An investor holds two stocks, each of which can rise ( R ) , remain unchanged ( U ) , or decline
An investor holds two stocks, each of which can rise R remain unchanged U or decline D on any particular day.
Assume that for the first stock
PR PU PD
and that for the second stock
PR PU PD
and assume that movements of the two stocks are independent.
A Let x equal the number of stocks that rise on a particular day. Write the probability distribution for xB What is the probability that the second stock does not rise if the first stock rises? C What is the probability that neither stock rises? Please answer this fully showing step by step how to solve it thank you!
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