Suppose you have historical data that says the probability a stock experiences a large price movement of more than 3% on a random day is 0.4. When a stock experiences a large price movement, that price movement is negative 60% of the time. If you select 10 daily stock price movements completely at random, what is the probability that exactly three of them had large price movements and that all three were negative? Assume one stock's price movement has no effect on the price movement of any other stock. Please provide your answer to the nearest 0.1%.

Suppose you have historical data that says the probability a stock experiences a large price movement of more than 3% on a random day is 0.4. When a stock experiences a large price movement, that price movement is negative 60% of the time. If you select 10 daily stock price movements completely at random, what is the probability that exactly three of them had large price movements and that all three were negative? Assume one stock's price movement has no effect on the price movement of any other stock. Please provide your answer to the nearest 0.1%.

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...

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