Question

consider a stock orice that varies according to the distribution:

Price. $5. $10. $20. $30. $60

probability .15 .20 .35 .20 .05

Let X be the random return if you sell 1 share of stock after buying it for $20.

Let Y benthe random return if you sell 1 share of stock after buying it fir $30.

For each random variable r.v,

a) its distribution

b) the expected return

c). the expected return if you had bought and then sold 10 instead of 1

Answer 1