Stock brokers assign probabilities to stock prices. Suppose that for a stock that has increased in value in the last six hours has a 0.7 probability that it will increase in the next six hours. A stock that has decreased in the last six hours has a 0.2 probability that it will increase in the next six hours. This model ignores a stock price that remains constant, as it is rare. • Construct a Markov matrix for the given probabilities. • Ascertain the probability that a stock which decreased in value in the last six hours will decrease again in twelve hours. • Ascertain the eigenvalues of the matrix you constructed.

Stock brokers assign probabilities to stock prices. Suppose that for a stock that has increased in value in the last six hours has a 0.7 probability that it will increase in the next six hours. A stock that has decreased in the last six hours has a 0.2 probability that it will increase in the next six hours. This model ignores a stock price that remains constant, as it is rare. • Construct a Markov matrix for the given probabilities. • Ascertain the probability that a stock which decreased in value in the last six hours will decrease again in twelve hours. • Ascertain the eigenvalues of the matrix you constructed.

Name: Answer the following questions. Stock brokers assign probabilities to
Uploaded: 2024-03-20T07:07:37.000Z
Channel: Bartleby
Description: Answer the following questions. Stock brokers assign probabilities to stock prices. Supposethat for a stock that has increased in value in the last six hours has a 0.72.probability that it will increase in the next six hours. A stock that hasdecrease

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter3: Matrices

Section3.7: Applications

Problem 12EQ: 12. Robots have been programmed to traverse the maze shown in Figure 3.28 and at each junction...

See similar textbooks