Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Simulation on MATLAB PLEASE DO this if u can Simulation of normally distributed stock prices Suppose we have the following model for monthly stock price

Simulation on MATLAB PLEASE DO this if u can

image text in transcribed

Simulation of normally distributed stock prices Suppose we have the following model for monthly stock price returns: In Se+1 - In S = 1+0t:t+1, where ett+1 ~ N(0,1). (a) Simulate 1,000 paths for the 1-year stock return. Plot the distribu- tion of the simulated 1-year stock returns. Report the average and standard deviation of the simulated distribution. Check if the average of the 1-year simulated stock returns is in the 99% confidence interval of the 1-year ex- pected stock return. Model parameters are: 1 = 0.5% and 9 = 5%. Simulation of normally distributed stock prices Suppose we have the following model for monthly stock price returns: In Se+1 - In S = 1+0t:t+1, where ett+1 ~ N(0,1). (a) Simulate 1,000 paths for the 1-year stock return. Plot the distribu- tion of the simulated 1-year stock returns. Report the average and standard deviation of the simulated distribution. Check if the average of the 1-year simulated stock returns is in the 99% confidence interval of the 1-year ex- pected stock return. Model parameters are: 1 = 0.5% and 9 = 5%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mergers Acquisitions And Other Restructuring Activities

Authors: Donald DePamphilis

10th Edition

0128150750, 978-0128150757

More Books

Students also viewed these Finance questions

Question

=+ Who are the buyers/users of the products abroad?

Answered: 1 week ago