Question: Calculate the likelihood of a drawdown in java to four figures Drawdown = (current index value - highest historical index value) / highest historical index
Calculate the likelihood of a drawdown in java to four figures
Drawdown = (current index value - highest historical index value) / highest historical index value
Ex you will be given a series of numbers say 0.22 -0.05 0.17 -0.03 0.12 -0.02 0.41 0.22 -0.03
Answer = 0.1071 => expected probability a downturn will be experienced of -10% over 9 years given 9 values above. The table below I made should help provide any missing context

Year Return Index High Mark Drawdown 0 1000 1000 1 12% 1120 1120 0% 2 -5% 1064 1120 -5% 3 33% 1415 1415 0% 4 28% 1811 1811 0% 5 -7% 1685 1811 -7% 6 -4% 1617 1811 -11%
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