Pick two stocks, one from a high growth industry and one from a low growth industry. The two stocks do not have to be related to each other. The goal of this assignment is to back-test a stochastic process for stock price using Monte Carlo simulation. Here is a basic set of instructions for the assignment. Using the geometric Brownian motion model as the stochastic process describing stock price behavior, simulate a path for the price of your chosen stocks at the end of each week from June 25, 2018 (week 1) to August 31, 2018 (week 10). To estimate the input parameters for the model, use daily closing stock price for 250 trading days ending June 22, 2018. What was the percent change in the stock price during the ten week period ending June 22, 2018?

Using Monte Carlo simulation, with (a) 10 trials, (b) 100 trials, and (c) 1000 trials, compute the probability of the stock price following the same trend over the ten weeks ending August 31, 2018 as the trend during the ten week period ending June 22, 2018. What do you expect to find when you compare the results for (a), (b), and (c)? Show your excel calculation.