Suppose that a certain frequently traded stock is only priced up to round dollar values (that is, nocents are considered), and you place a BUY trade for $10/share today. The price of this stockchanges every day, and, by the end of trading hours each day, it goes up by $1 with probabilityp=0.51, and down by $1 with probability 1-p. As a wise investor, you place a STOP order thatautomatically sells all your shares if the market price reaches $5/share at any time in the future, tolimit your losses in case the market moves against you. Furthermore, you place an order to SELL allyour shares if the market price reaches $15/share. What is the probability that your SELL orderexecutes before your STOP order?(TYPE YOUR ANSWER AS A NUMBER WITH TWO DECIMALS, I.E., BETWEEN 0.00 AND 1.00.REMEMBER TO ROUND TO THE *NEAREST* SUCH NUMBER)

Answered: a certain frequently traded stock is…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Similar questions

The average number of tesla cars that you can see on your drive to work is 25. What is the probability that you would see exactly 30 tesla cars tomorrow
A friend promises to call you at home sometime between 3 p.m. and4 p.m. At 2:45 p.m. you must leave your house unexpectedly for half anhour. What is the probability you miss the first call?
A competition offers prize money for players reaching the final. If aplayer reaches the final, he/she will get 1000 dollars. If the player winsthe final and get the champion, another 1000 dollars are offered. Now aplayer has already reached the semi-final, what’s the expectation of prizemoney he would have after the competition?
Each of the questions in this boxpertains to rollinga pair of fair dice. Find the probability that the sum is more than 10.
Illustration 66. 50 out of every 1000 cigarettes are rolled up in gold flake and are mixed with the general cigarettes at random. The company offers to trade a new packet of cigarettes for each gold cigarette, a smoker finds in a packet of Brand X. What is the probability that the buyers of Brand, X will find X = 0, 1, 2, 3 and 4 gold cigarettes in a single packet of 10 ? 6.
Please provide steps for how you got the solution to the problem provided below. A freelance worker spends her days doing one of two things: working on a project or looking for a new project. Whenever she has a project to work on, she dedicates her full attention to it. On a particular month, she will complete the current project with probability 0.3. After completing project she takes the rest of the month off, and then at the beginning of the next month starts looking for work. On a given month, she will successfully find a new project with probability 0.85. After identifying a new project, she will start working on it at the beginning of the next month. i. Model the status of the worker (looking for a project of busy working a project) as a Markov chain. Give transition matrix. ii. Suppose that on March 1st she started looking for a new project. Find the probability that she will be working on a project during the month of May.
Suppose that 51% of the people who inquire about investments at a certain brokerage firm end up investing in stocks, 41% end up investing in bonds, and 61% end up investing in stocks or bonds (or both). What is the probability that a person who inquires about investments at this firm will invest in both stocks and bonds? Write your answer as a decimal (not as a percentage).
Show all your work and explain each step. A laboratory blood test is 0.95 effective in detecting Corona virus, when it is, in fact, present. However, the test also yields a "false positive" result for 1 percent of the healthy persons tested. (That is, if a healthy person is tested, then, with probability 0.01, the result will imply s/he has the Corona virus.) If 0.5 percent of the population in King County has the virus, what is the probability a person has the virus given that his or her test result is positive?
solve the following
Please provide steps for how you got the solution to the problem provided below. A machine is used to produce one of each of two types of product (A and B) on alternating days, i.e., if A is produced today then B will be produced tomorrow and vice versa. Each day, there is a probability that the machine malfunctions. Malfunction probability after a day of operation is 0.03 when producing A and 0.07 when producing B. Once the machine malfunctions, it is no longer operable and will not be replaced until sometime in the future (beyond modeling horizon). Model the system as a Markov chain (give transition matrix on your paper). Suppose that on Monday product A was produced. Find the probability that the machine is still operable by the morning of Thursday. Your model should have a state ”malfunction”, which cannot transition to any other state other than itself.
Suppose the probability of getting the flu is 0.20, the probability of getting a flu shot is 0.60, and the probability of bothgetting the flu and a flu shot is 0.10. (a) Find the probability of the union between (getting the the flu) and (getting the flu shot).

Recommended textbooks for you

A First Course in Probability (10th Edition)

Probability

ISBN:

9780134753119

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability

Probability

ISBN:

9780321794772

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability (10th Edition)

Probability

ISBN:

9780134753119

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability

Probability

ISBN:

9780321794772

Author:

Sheldon Ross

Publisher:

PEARSON

SEE MORE TEXTBOOKS