Consider a financial asset (for instance a stock) and assume its value today is $100. Let X; be the change in value of the asset (in $) on day i. After 60 days, the value of the asset will be X = 100+ X₁+X2+...+X60- We model these unknown price changes, X,, as random variables with the properties: The random variables X, are independent. ⚫ The random variables X, have expected value $0.3 and standard deviation $1.2. (a) Estimate the probability that we make a gain in our investment, i.e. P(X >$100). You may use the table in the appendix.
Consider a financial asset (for instance a stock) and assume its value today is $100. Let X; be the change in value of the asset (in $) on day i. After 60 days, the value of the asset will be X = 100+ X₁+X2+...+X60- We model these unknown price changes, X,, as random variables with the properties: The random variables X, are independent. ⚫ The random variables X, have expected value $0.3 and standard deviation $1.2. (a) Estimate the probability that we make a gain in our investment, i.e. P(X >$100). You may use the table in the appendix.
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.8: Probability
Problem 32E
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