The price of a share of a particular stock listed on the New York Stock Exchange is
Question:
The price of a share of a particular stock listed on the New York Stock Exchange is currently $39. The following probability distribution shows how the price per share is expected to change over a three-month period:
Stock Price Change ($) Probability
-2 ...........0.05
-1 ...........0.10
0 ...........0.25
+1 ...........0.20
+2 ...........0.20
+3 ...........0.10
+4 ...........0.10
a. Set up intervals of random numbers that can be used to generate the change in stock price over a three-month period.
b. With the current price of $39 per share and the random numbers 0.1091, 0.9407, 0.1941, and 0.8083, simulate the price per share for the next four 3-month periods. What is the ending simulated price per share?
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Step by Step Answer:
Quantitative Methods For Business
ISBN: 148
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam