Answer:
the stock will sell for $59.16
Step-by-step explanation:
P0 = 2 * (1+0.2) / (1+0.105) + 2 * (1+0.2) * (1+0.12) / (1+0.105)^2 +
2*(1+0.2)*(1+0.12)^2 / (1+0.105)^3 +
[(2 * (1+0.2) * (1+0.12)^2 * (1+0.06) / (0.105-0.06)) / (1+0.105)^3 ]
P0 = $59.16
We are asked for the total or three card hands that can be made with two aces. The three-card hand should have two aces. We will use permutation in solving this problem and the solution is shown below:
nPr = n! /(n-r)!
n=3
r=2
3P2 = 3!/(3-2)!
3P2 = 6
The answer is 6.
There is only one solution and the solution is x=-22
