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?


Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Quantitative Methods for Business

ISBN: 978-0324651751

11th Edition

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

Question Posted: