2. The price of a stock on each day either moves up $1 with probability 0.4 or moves down $1 with probability 0.6. The changes on different days are assumed to be independent. (a) What is the probability that after two days the stock will be at its original price? (b) What is the probability that after 3 days the stock's price will have increased by 1 unit? (c) Given that after 3 days the stock's price has increased by 1 unit, what is the probability that it went up on the first day?

MATLAB: An Introduction with Applications
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ISBN:9781119256830
Author:Amos Gilat
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2. The price of a stock on each day either moves up $1 with probability 0.4 or moves down $1 with
probability 0.6. The changes on different days are assumed to be independent.
(a) What is the probability that after two days the stock will be at its original price?
(b) What is the probability that after 3 days the stock's price will have increased by 1 unit?
(c) Given that after 3 days the stock's price has increased by 1 unit, what is the probability that it
went up on the first day? (
Transcribed Image Text:2. The price of a stock on each day either moves up $1 with probability 0.4 or moves down $1 with probability 0.6. The changes on different days are assumed to be independent. (a) What is the probability that after two days the stock will be at its original price? (b) What is the probability that after 3 days the stock's price will have increased by 1 unit? (c) Given that after 3 days the stock's price has increased by 1 unit, what is the probability that it went up on the first day? (
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