Question

In: Statistics and Probability

Problem 12-05 (Algorithmic) The price of a share of a particular stock listed on the New...

Problem 12-05 (Algorithmic) The price of a share of a particular stock listed on the New York Stock Exchange is currently $42. The following probability distribution shows how the price per share is expected to change over a three-month period: Stock Price Change ($) Probability -1 0.10 0 0.05 1 0.20 2 0.30 3 0.10 4 0.05 5 0.20 Set up intervals of random numbers that can be used to generate the change in stock price over a three-month period. If required, round your answers to two decimal places. Stock Price Change Probability Interval -1 0.10 but less than 0 0.05 but less than +1 0.20 but less than +2 0.30 but less than +3 0.10 but less than +4 0.05 but less than +5 0.20 but less than With the current price of $42 per share and the random numbers 0.8661, 0.6547, 0.0507 and 0.6333, simulate the price per share for the next four 3-month periods. Random Number Price Change Ending Price Per Share 0.8661 $ 0.6547 $ 0.0507 $ 0.6333 $ What is the ending simulated price per share? $

Solutions

Expert Solution

Please rate my answer

orchestra answered 2 years ago
Next > < Previous

Related Solutions

Suppose that the price of a share of a particular stock listed on the New York...
Suppose that 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 –2 0.10 0 0.25 +1 0.20 +2 0.20 +3 0.10 +4 0.10 (a) Construct a spreadsheet simulation model that computes the value of the stock price in 3 months, 6 months, 9 months, and...
Problem 12-11 (Algorithmic) Over a five-year period, the quarterly change in the price per share of...
Problem 12-11 (Algorithmic) Over a five-year period, the quarterly change in the price per share of common stock for a major oil company ranged from -7% to 10%. A financial analyst wants to learn what can be expected for price appreciation of this stock over the next two years. Using the five-year history as a basis, the analyst is willing to assume that the change in price for each quarter is uniformly distributed between -7% and 10%. Use simulation to...
Problem 12-11 (Algorithmic) Over a five-year period, the quarterly change in the price per share of...
Problem 12-11 (Algorithmic) Over a five-year period, the quarterly change in the price per share of common stock for a major oil company ranged from -9% to 12%. A financial analyst wants to learn what can be expected for price appreciation of this stock over the next two years. Using the five-year history as a basis, the analyst is willing to assume that the change in price for each quarter is uniformly distributed between -9% and 12%. Use simulation to...
Problem 12-14 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new...
Problem 12-14 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $30,000. The variable cost for the product is uniformly distributed between $16 and $24 per unit. The product will sell for $50 per unit. Demand for the product is best described by a normal probability distribution with a mean of 1,200 units and a standard deviation of 300 units. Develop an Excel...
Problem 12-14 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new...
Problem 12-14 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $36,000. The variable cost for the product is uniformly distributed between $20 and $28 per unit. The product will sell for $56 per unit. Demand for the product is best described by a normal probability distribution with a mean of 1,200 units and a standard deviation of 100 units. Develop an Excel...
Problem 16-05 (Algorithmic) A major traffic problem in the Greater Cincinnati area involves traffic attempting to...
Problem 16-05 (Algorithmic) A major traffic problem in the Greater Cincinnati area involves traffic attempting to cross the Ohio River from Cincinnati to Kentucky using Interstate 75. Let us assume that the probability of no traffic delay in one period, given no traffic delay in the preceding period, is 0.9 and that the probability of finding a traffic delay in one period, given a delay in the preceding period, is 0.75. Traffic is classified as having either a delay or...
Problem 16-05 (Algorithmic) A major traffic problem in the Greater Cincinnati area involves traffic attempting to...
Problem 16-05 (Algorithmic) A major traffic problem in the Greater Cincinnati area involves traffic attempting to cross the Ohio River from Cincinnati to Kentucky using Interstate 75. Let us assume that the probability of no traffic delay in one period, given no traffic delay in the preceding period, is 0.8 and that the probability of finding a traffic delay in one period, given a delay in the preceding period, is 0.65. Traffic is classified as having either a delay or...
Problem 16-05 (Algorithmic) A major traffic problem in the Greater Cincinnati area involves traffic attempting to...
Problem 16-05 (Algorithmic) A major traffic problem in the Greater Cincinnati area involves traffic attempting to cross the Ohio River from Cincinnati to Kentucky using Interstate 75. Let us assume that the probability of no traffic delay in one period, given no traffic delay in the preceding period, is 0.8 and that the probability of finding a traffic delay in one period, given a delay in the preceding period, is 0.65. Traffic is classified as having either a delay or...
Problem 12-18 (Algorithmic) A building contractor is preparing a bid on a new construction project. Two...
Problem 12-18 (Algorithmic) A building contractor is preparing a bid on a new construction project. Two other contractors will be submitting bids for the same project. Based on past bidding practices, bids from the other contractors can be described by the following probability distributions: Contractor Probability Distribution of Bid A Uniform probability distribution between $530,000 and $730,000 B Normal probability distribution with a mean bid of $630,000 and a standard deviation of $43,000 If required, round your answers to three...
Problem 9-05 (Algorithmic) Kilgore’s Deli is a small delicatessen located near a major university. Kilgore’s does...
Problem 9-05 (Algorithmic) Kilgore’s Deli is a small delicatessen located near a major university. Kilgore’s does a large walk-in carry-out lunch business. The deli offers two luncheon chili specials, Wimpy and Dial 911. At the beginning of the day, Kilgore needs to decide how much of each special to make (he always sells out of whatever he makes). The profit on one serving of Wimpy is $0.51, on one serving of Dial 911, $0.69. Each serving of Wimpy requires 0.21...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT