Question
The price of a share of a particular stock listed on the New York Stock Exchange is currently $41. The following probability distribution shows how
The price of a share of a particular stock listed on the New York Stock Exchange is currently $41. The following probability distribution shows how the price per share is expected to change over a three-month period:
Stock Price Change ($) | Probability |
---|---|
-1 | 0.15 |
0 | 0.10 |
1 | 0.05 |
2 | 0.10 |
3 | 0.25 |
4 | 0.25 |
5 | 0.10 |
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 |
---|---|---|
-1 | 0.15 | but less than |
0 | 0.10 | but less than |
+1 | 0.05 | but less than |
+2 | 0.10 | but less than |
+3 | 0.25 | but less than |
+4 | 0.25 | but less than |
+5 | 0.10 | but less than |
With the current price of $41 per share and the random numbers 0.3707, 0.0873, 0.2745 and 0.5897, simulate the price per share for the next four 3-month periods.
Random Number | Price Change | Ending Price Per Share |
---|---|---|
0.3707 | $ | |
0.0873 | $ | |
0.2745 | $ | |
0.5897 | $ |
What is the ending simulated price per share? $
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