An investor holds two stocks, each of which can rise (r), remain unchanged (u), or decline (d) on any particular day. assume that for the first stock (on a particular day)
p(r) = 0.2 , p(u) = 0.6 , p(d ) = 0.2
and that for the second stock (on a particular day)
p(r) = 0.3 , p(u) = 0.4 , p(d ) = 0.3
assuming that these stocks move independently, find the probability that both stocks decline; the probability that exactly one stock rises; the probability that exactly one stock is unchanged; the probability that both stocks rise. (round your answers to 2 decimal places.)
both decline =
exactly one rises =
exactly one unchanged =
both rise =
Answers: 2
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An investor holds two stocks, each of which can rise (r), remain unchanged (u), or decline (d) on an...
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