If logx √2 = 1/6 , then x =?
2 answers:
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Answer:
a) 0.3571 = 35.71% probability that the stock price will be more than $25.
b) 0.1429 = 14.29% probability that the stock price will be less than or equal to $18.
Step-by-step explanation:
Uniform probability distribution:
An uniform distribution has two bounds, a and b.
The probability of finding a value of at lower than x is:
The probability of finding a value between c and d is:
The probability of finding a value above x is:
Uniformly distributed between $16 and $30 per share.
This means that
a) More than $25?
0.3571 = 35.71% probability that the stock price will be more than $25.
b) Less than or equal to $18?
0.1429 = 14.29% probability that the stock price will be less than or equal to $18.