Question
The price of a share of a particular stock listed on the New York Stock Exchange is currently $36. The following probability distribution shows how
The price of a share of a particular stock listed on the New York Stock Exchange is currently $36. The following probability distribution shows how the price per share is expected to change over a three-month period:
Stock Price Change ($) | Probability |
---|---|
-4 | 0.20 |
-3 | 0.25 |
-2 | 0.15 |
-1 | 0.05 |
0 | 0.10 |
1 | 0.20 |
2 | 0.05 |
A. Set up intervals of random numbers that can be used to generate the change in stock price over a three-month period. If required, round your answers to two decimal places.
Stock Price Change | Probability | Interval |
---|---|---|
-4 | 0.20 | ---------but less than------- |
-3 | 0.25 | ---------but less than-------- |
-2 | 0.15 | ---------but less than ----- |
-1 | 0.05 | ---------but less than -------- |
0 | 0.10 | --------- but less than-------- |
+1 | 0.20 | --------but less than ------ |
+2 | 0.05 | ----------but less than -------- |
B. With the current price of $36 per share and the random numbers 0.5913, 0.9853, 0.9371 and 0.1389, simulate the price per share for the next four 3-month periods.
Random Number | Price Change | Ending Price Per Share |
---|---|---|
0.5913 | $ | |
0.9853 | $ | |
0.9371 | $ | |
0.1389 | $ |
What is the ending simulated price per share? $ ----------
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