Mary Higgins is a freelance writer with enough spare time on her hands to play the stock market fairly seriously. Each morning, she observes the change in stock price of a particular stock and decides...

Mary Higgins is a freelance writer with enough spare time on her hands to play the stock market fairly seriously. Each morning, she observes the change in stock price of a particular stock and decides whether to buy or sell, and if so, how many shares to buy or sell. We assume that on day 1, she has $100,000 cash to invest and that she spends part of this to buy her first 500 shares of the stock at the current price of $50 per share. From that point on, she follows a fairly simple “buy low, sell high” strategy. Specifically, if the price has increased three days in a row, she sells 25% of her shares of the stock.

If the price has increased two days in a row (but not three), she sells 10% of her shares. In the other direction, if the price has decreased three days in a row, she buys 25% more shares, whereas if the price has decreased only two days in a row, she buys 10% more shares. We assume a fairly simple model of stock price changes, as described in the file P12_50.xlsx. Each day, the price can change by as much as $2 in either direction, and the probabilities depend on the previous price change: decrease, increase, or no change. Build a simulation model of this strategy for a period of 75 trading days. (You can assume that the stock price on each of the previous two days was $49.) Decide on interesting @RISK output cells, and then run @RISK and report your findings.