The price of a share of a particular stock listed on the New York Stock Exchange is

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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?


Distribution
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Quantitative Methods For Business

ISBN: 148

11th Edition

Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam

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