Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose we are examining 500 trading days data for Asset XYZ during 2016-2017. Suppose we find out, in 2016, there are 10 days that XYZs

Suppose we are examining 500 trading days data for Asset XYZ during 2016-2017. Suppose we find out, in 2016, there are 10 days that XYZs stock price is traded below 50; in 2017, there are 5 days that XYZs stock price is traded below 50. Among those incidents of price below 50, we find that:

The occurrences of the price staying below 50 for consecutively 1 day = 6

The occurrences of the price staying below 50 for consecutively 2 days = 4

The occurrences of the price staying below 50 for consecutively 3 days = 3

The occurrences of the price staying below 50 for consecutively 4 days = 2

Which one of the following statements is WRONG?

- It is more likely that the price drops below 50 in one day and quickly jump high above 50 the next day, than staying below 50 for consecutive 3 days.

- It is more likely that the price stays below 50 for consecutive 2 days, than staying below 50 for consecutive 4 days.

- Among all the cases where the stock price drops below 50, the occurrences of the price staying below 50 for consecutively 4 days account for roughly 13 %

- Among all the 500 trading days, the occurrences of the price staying below 50 for consecutively 4 days account for roughly 13 %.

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

M Finance

Authors: Marcia Cornett, Troy Adair, John Nofsinger

3rd Edition

0077861779, 978-0077861773

More Books

Students also viewed these Finance questions

Question

Calculate the purchase price of each of the $1000 face value bonds

Answered: 1 week ago