3) An investor owns shares in a stock whose present value is 20. She has decided that she must sell her stock if it goes either down to 15 or up to 35. If each change of price is either up 1 point with probability 0.4 or down 1 point with probability 0.6, and successive changes are independent, what is the probability that the investor DOES NOT make a profit in this trading?

Holt Mcdougal Larson Pre-algebra: Student Edition 2012
1st Edition
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Chapter11: Data Analysis And Probability
Section11.8: Probabilities Of Disjoint And Overlapping Events
Problem 2C
icon
Related questions
Question
An investor owns shares in a stock whose present value is 20. She has decided that she must sell
her stock if it goes either down to 15 or up to 35. If each change of price is either up 1 point with probability
0.4 or down 1 point with probability 0.6, and successive changes are independent, what is the probability that
the investor DOES NOT make a profit in this trading?
Transcribed Image Text:An investor owns shares in a stock whose present value is 20. She has decided that she must sell her stock if it goes either down to 15 or up to 35. If each change of price is either up 1 point with probability 0.4 or down 1 point with probability 0.6, and successive changes are independent, what is the probability that the investor DOES NOT make a profit in this trading?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Recommended textbooks for you
Holt Mcdougal Larson Pre-algebra: Student Edition…
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL
College Algebra
College Algebra
Algebra
ISBN:
9781337282291
Author:
Ron Larson
Publisher:
Cengage Learning
College Algebra
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning