A share is priced currently at $100. One year from now, there is a 50% chance that the share price will increase by 70% and 509 chance that share price will decrease by 50%. What is the median price of the stock after 4 years?

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
Question

Choose the correct option

A share is priced currently at $100. One year from now, there is
a 50% chance that the share price will increase by 70% and 50%
chance that share price will decrease by 50%. What is the
median price of the stock after 4 years?
Select one:
O A. 100 x (0.9 x 2)
O B. 100 x (1.1^ 2)
O. 100 x (0.85^ 2)
O D. 100 x (0.85 x 2)
O E. None of the above
Transcribed Image Text:A share is priced currently at $100. One year from now, there is a 50% chance that the share price will increase by 70% and 50% chance that share price will decrease by 50%. What is the median price of the stock after 4 years? Select one: O A. 100 x (0.9 x 2) O B. 100 x (1.1^ 2) O. 100 x (0.85^ 2) O D. 100 x (0.85 x 2) O E. None of the above
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Linear Equations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman