The price of a share of a particular stock listed on the New York Stock Exchange is currently $39. The probability distribution shows how the price per share is expected to change over a 3-month period.   Build a simulation model that spans five years (20 periods). Using this one iteration, what do you expect the

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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The price of a share of a particular stock listed on the New York Stock Exchange is currently $39. The probability distribution shows how the price per share is expected to change over a 3-month period.   Build a simulation model that spans five years (20 periods).

Using this one iteration, what do you expect the price of the stock to be at the end of 5 years?

Cumulative Prob 3-month Change in Stock Price ($) Probability
0 -2 5%
5% -1 10%
15% 0 25%
40% 1 20%
60% 2 20%
80% 3 10%
90% 4 10%
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