I need to calculate the pdf for X_i after one year given:
This assumes there is a move in the stock market, either up or down each week.
up=1.012
down=.99
p=.52
n=52 weeks
i
Do I use S_n = S_0 *u^n-i * d^i ?
Not sure how to show this.
Thanks
Last edited by taypez; March 26th 2008 at 05:40 PM.
I need to calculate the pdf for X_i after one year given:
This assumes there is a move in the stock market, either up or down each week.
up=1.012
down=.99
p=.52
n=52 weeks
i
Do I use S_n = S_0 *u^n-i * d^i ?
Not sure how to show this.
Thanks
The probability of upward movements and downward movements is: