Exercise. Consider a stock over two-day period with current price of 120. Suppose that the stock price will move up or down 10 points with probabilities 0.7 and 0.3, respectively, on day one and it will move up or down 5 units with probabilities 0.6 and 0.4, respectively, on day two. (a) Find the sample space, describe sigma-algebras of prices on day one and day two. (b) Let X be the stock price on day two. Is X a random variable with respect to the sigma-algebras above?

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