Stock Price Change ($) Probability -2 0.05 -1 0.10 0.25 +1 0.20 +2 0.20 +3 0.10 +4 0.10

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The price of a share of a particular stock listed on the New York Stock Exchange is
currently $39. The following probability distribution shows how the price per share is
expected to change over a three-month period:

Stock Price
Change ($)
Probability
-2
0.05
-1
0.10
0.25
+1
0.20
+2
0.20
+3
0.10
+4
0.10
Transcribed Image Text:Stock Price Change ($) Probability -2 0.05 -1 0.10 0.25 +1 0.20 +2 0.20 +3 0.10 +4 0.10
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