Mathematics, 28.11.2019 22:31 erik1franks
Many people believe that the daily change of price of a company's stock on the stock market is a random variable with mean 0 and variance 2. that is, if yn represents the price of the stock on the n-th day, then yn = yn-1 + xn, n > 1 where x1, x2, . . are independent and identically distributed random variables with mean 0 and variance 2. suppose that the stock's price today is 100. if 2 = 1, use clt to approximate the probability that the stock's price will exceed 105 on the 10-th day?
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