[11] The price of one share of stock in the Pilsdorff Beer Company (see Exercise XXXXXXXXXXis given by Yn on the nth day of the year. Finn observes that the differences Xn = Yn+1 - Yn appear to be...

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[11] The price of one share of stock in the Pilsdorff Beer Company (see Exercise 8.2.12) is given by Yn on the nth day of the year. Finn observes that the differences Xn = Yn+1 - Yn appear to be independent random variables with a common distribution having mean µ = 0 and variance s 2 = 1/4. If Y1 = 100, estimate the probability that Y365 is (a) = 100. (b) = 110. (c) = 120.

Answered Same DayDec 25, 2021

Answer To: [11] The price of one share of stock in the Pilsdorff Beer Company (see Exercise XXXXXXXXXXis given...

Robert answered on Dec 25 2021
120 Votes
Solution:



Given data:



a)
( ) (





)
(



( )
√ (


)
) (


)
By CLT,


is approximately standard model, hence we can express as,
( ) ( ) ...
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