dbzrules02
dbzrules02
15.12.2021 • 
Mathematics

A model for the movement of a stock price supposes that if the present price is S then after one period, say one second, it will either go up to uS with probability p or go down to dS with probability q = 1-p. Assuming that successive movements are independent, approximate the probability that the stock price will be up by at least 5% after the next 1000 periods for u = 1.03, d = 0.96 and p = 0.6

Solved
Show answers

Ask an AI advisor a question