Question
An investor holds two stocks, each of which can rise ( R ), remain unchanged ( U ), or decline ( D ) on any
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 (on a particular day)
P(R) = .6 ,P(U) = .1 ,P(D) = .3
and that for the second stock (on a particular day)
P(R) = .4 ,P(U) = .5 ,P(D) = .1
Assuming that these stocks move independently, find the probability that both stocks decline; the probability that exactly one stock rises; the probability that exactly one stock is unchanged; the probability that both stocks rise.(Round your answers to 2 decimal places.)
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