Question

This question has multiple choice answers. The answer is either A, B, C, D or E.

Question:

The price of a share of stock is currently $39. The following probability distribution shows how the price per share is expected to change over a 3-month period:

Price Change ($)   Probability

            -2                     0.05

            -1                     0.10

            0                    0.25

            +1                    0.35

            +2                    0.25

If you were to set up a table for random sampling from this distribution using VLOOKUP on Excel, what price change would you generate using a random number of 0.7499?

Multiple choice answers:

A.) +2

B.) +1

C.) -2

D.) 0

E.) -1

Answer 1