Business, 21.02.2020 01:10 gumbyseth1969p45qjl

You purchase a hot stock for $1000. The stock either gains 40% or loses 35% each day, each with probability 0.5. Its returns on consecutive days are independent of each other. This implies that all four possible combinations of gains and losses in two days are equally likely, each having probability 0.25. You plan to sell the stock after two days. What are the possible values of the stock after two days, and what is the probability for each value?

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You purchase a hot stock for $1000. The stock either gains 40% or loses 35% each day, each with prob...

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