A simple model of the stock market suggests that, each day, a stock with price q...
A simple model of the stock market suggests that, each day, a stock with price q will increase by a factor r > 1 to qr with probability p, and will fall to q/r with probability (1-p). Assuming we start with a stock with price 1, find a formula for the expected value and the variance of the price of the stock after d days.
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A simple model of the stock market suggests that, each day, a
stock with price q...
Each day the price of a stock goes up a dollar with probability .75, or down...
Each day the price of a stock goes up a dollar with probability .75, or down a dollar with probability .25. Assuming these fluctuations to be independent, what is the probability that after 6 days the stock will be trading at the same price? What is the probability that it will have gone down? How can I do it in Microsoft Excel?
Prob. 4. (20pt) On stock market, the price of a particular stock A is not constant....
Prob. 4. (20pt) On stock market, the price of a particular stock A is not constant. In fact, at the end of each day, the price of A changes by a random amount. This random amount is uniformly distributed in -0.5,0.5 HK dollars. We are interested in the probability that the price of A changes more than 10 HK dollars after 100 days. a) (5pts) Are there enough conditions for you to apply Central Limit Theorem? If b) (10pts) Based...
The value of a stock market share may be assumed to vary from day to day...
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(AAPL Fun) Recent data, collected on a quarterly (3-month) basis suggests, that Apple stock price...
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The increase or decrease in the price of a stock between the beginning and the end of a trading day is assumed to be an equally likely random event. What is the probability that a stock will show an increase in its closing price on seven consecutive days? The probability that a stock will show an increase in its closing price on seven consecutive days is (Round to four decimal places as needed.) Assume a Poisson distribution a. If λ-2.5,...
Suppose that each day the price of a stock moves up 1/8 th of a point...
Suppose that each day the price of a stock moves up 1/8 th of a point with probability 1/3 and down 1/8 th of a point with probability 2/3. The price fluctuations are independent each day. (a) What is the probability that the stock has a price gain in 6 days?
Assume that, in one day, a stock price can go up by 1 point with probability...
Assume that, in one day, a stock price can go up by 1 point with probability 0.4, or down by 1 point with probability 0.3; the price can also remain the same. After 40 days, what is the probability that the stock price increases by more than 6.5 points?
a company's stock price is $42, it pays out all earnings as dividends, so the simple...
a company's stock price is $42, it pays out all earnings as dividends, so the simple dividend discount model is appropriate. assume the discount factor the market applies to the company's expected dividend is 8%. If ROE is 16%, what is the book value per share? Answer is 21. Please show all work how to get to the answer.
Consider the following results of a simple regression model of dollar price of unleaded gas (dependent variable) and dollar price of crude oil (independent variable): Coefficient t-statistics...
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5. Consider a binomial tree model for a stock price, S(n) as above. Find a probability...
5. Consider a binomial tree model for a stock price, S(n) as above. Find a probability value p, in the case when the risk free assest has a continuous compounding rate of r. What are the bounds on e', that is, what is the smallest and largest value it can be in terms of u and d which prevent arbitrage? S(n) is a stock price where K1)u with probability p and K(1d with probability 1-p and K(1). K(n) are independent...
Prob. 4. (20pt) On stock market, the price of a particular stock A is not constant. In fact, at the end of each day, the price of A changes by a random amount. This random amount is uniformly distributed in -0.5,0.5 HK dollars. We are interested in the probability that the price of A changes more than 10 HK dollars after 100 days. a) (5pts) Are there enough conditions for you to apply Central Limit Theorem? If b) (10pts) Based...
The value of a stock market share may be assumed to vary from day to day according to the following rule: if it is £n one day (n > 0), then the next day with probability p it will be worth £(n + 1) and with probability q-it will be worth E(n Gary owns one share. Today it is worth £10. Gary has decided to sell the share immediately if its value either drops to £6 (in which case he...
(AAPL Fun) Recent data, collected on a quarterly (3-month) basis suggests, that Apple stock price (AAPL) is equal likely to increase or decrease in every quarter. When AAPL increases at the end of a quarter, it does so by a factor of 1.105, with respect to its value at the beginning of the quarter. When AAPL decreases at the end of a quarter, it does so by a factor of 1/1.105 0.905, with respect to its value at the beginning...
The increase or decrease in the price of a stock between the beginning and the end of a trading day is assumed to be an equally likely random event. What is the probability that a stock will show an increase in its closing price on seven consecutive days? The probability that a stock will show an increase in its closing price on seven consecutive days is (Round to four decimal places as needed.) Assume a Poisson distribution a. If λ-2.5,...
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