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An investment with initial value zero can go up or down $10,000 per month with equal likelihood. (a) What is

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An investment with initial value zero can go up or down $10,000 per month with equal likelihood. 


(a) What is probability that the investment will reach $1,000,000 without reaching –$250,000?


 (b) What is the probability that the investment will reach $1,000,000 twice without reaching –$250,000? 


(c) Suppose the up vs. down probabilities are different. What is the minimum win probability p that would make it more likely than not to reach +$1M before hitting –$250K?

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Answer rating: 100% (QA)

ANSWER A THE PROBABILITY THAT THE INVESTMENT WILL REACH 1000000 WI View the full answer


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Related Book For  answer-question
Managerial Economics Markets and the Firm

Managerial Economics Markets and the Firm

ISBN: 978-0618988624

2nd edition

Authors: William Boyes

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Posted Date: August 19, 2020 19:02:22
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