Results 1 to 2 of 2

Math Help - Probability word problem

  1. #1
    Senior Member
    Joined
    Nov 2012
    From
    Hawaii
    Posts
    264
    Thanks
    2

    Probability word problem

    A random walk on Wall Street? The "random walk" theory of stock prices holds that price movements in disjoint time periods are independent of each other. Suppose that we record only whether the price is up or down each year, and that the probability that our portfolio rises in price in any one year is 0.65. (This probability is approximately correct for a portfolio containing equal dollar amounts of all common stocks listed on the New York Stock Exchange.)

    (a) What is the probability that our portfolio goes up for three consecutive years?
    (b) What
    is the probability that the portfolio's value moves in the same direction (either up or down)for three consecutive years?

    Last edited by asilvester635; November 13th 2012 at 06:16 PM.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    MHF Contributor
    Joined
    Sep 2012
    From
    Australia
    Posts
    3,660
    Thanks
    606

    Re: Probability word problem

    Hey asilvester635.

    Show us what you have tried and more importantly the assumptions you have made.
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Probability Word Problem
    Posted in the Statistics Forum
    Replies: 1
    Last Post: April 21st 2010, 07:10 PM
  2. Probability Word Problem
    Posted in the Advanced Statistics Forum
    Replies: 0
    Last Post: February 7th 2009, 07:03 AM
  3. Sorry, One More Probability Word Problem!
    Posted in the Statistics Forum
    Replies: 1
    Last Post: January 28th 2009, 01:54 PM
  4. probability word problem help, please....
    Posted in the Statistics Forum
    Replies: 7
    Last Post: January 8th 2009, 05:54 PM
  5. Probability word problem
    Posted in the Trigonometry Forum
    Replies: 1
    Last Post: May 23rd 2008, 03:12 PM

Search Tags


/mathhelpforum @mathhelpforum