State your assumptions. 5.29. A model for the movement of a stock supposes that if the present price of the stock is s, then after one period, it will be either us with probability por ds with probability 1 - p. Assuming that successive movements are independent, approximate the probability that the stock's price will be up at least 30 percent after the next 1000 periods if u = 1.012, d = 0.990, and p = .52. 5.20 I partitioned into two regions one white and the other black

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...
icon
Related questions
Question

How can I solve this question 5.29

State your assumptions.
5.29. A model for the movement of a stock supposes that if the present price
of the stock is s, then after one period, it will be either us with probability p or
ds with probability 1 - p. Assuming that successive movements are
independent, approximate the probability that the stock's price will be up at
least 30 percent after the next 1000 periods if u = 1.012, d = 0.990, and
p=
<= .52.
I
partitioned into two regions one white and the other black
Transcribed Image Text:State your assumptions. 5.29. A model for the movement of a stock supposes that if the present price of the stock is s, then after one period, it will be either us with probability p or ds with probability 1 - p. Assuming that successive movements are independent, approximate the probability that the stock's price will be up at least 30 percent after the next 1000 periods if u = 1.012, d = 0.990, and p= <= .52. I partitioned into two regions one white and the other black
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

How " P(Z>= -3.1965) " became " 1-symbol(-3.1965)"? Could you explain how you got the three last lines? Which symbol is that?

Solution
Bartleby Expert
SEE SOLUTION