Starting at some fixed time, let F(n) denotes the price of a First Local Bank share at the end of n additional weeks, n ≥ 1; and let the evolution of these prices assumes that the price ratios F(n)/F(n − 1) for n ≥ 1 are independent and identically distributed lognormal random variables. Assuming this model, with lognormal parameters µ = 0.012 and σ = 0.048, what is the probability that the price of the share at the end of the four weeks is higher than it is today?

Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
6th Edition
ISBN:9781337111348
Author:Bruce Crauder, Benny Evans, Alan Noell
Publisher:Bruce Crauder, Benny Evans, Alan Noell
Chapter4: Exponential Functions
Section4.4: Modeling Nearly Exponential Data
Problem 3E: Special Rounding Instructions For this exercise set, round all regression parameters to three...
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Starting at some fixed time, let F(n) denotes the price of a First Local Bank share at the end of n additional
weeks, n ≥ 1; and let the evolution of these prices assumes that the price ratios F(n)/F(n − 1) for n ≥ 1
are independent and identically distributed lognormal random variables. Assuming this model, with lognormal
parameters µ = 0.012 and σ = 0.048, what is the probability that the price of the share at the end of the four
weeks is higher than it is today? 

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