Probability tree - probabilities and values of each branch
1 view (last 30 days)
Show older comments
Dear Matlab community,
I found a somewhat related post, but it is not quite the same, so I decided to start a new post.
The problem: I am looking at a probability tree: Stage one: The price of a stock is initially $50 In each round, the price can change
(-3,-2,-1,0,+1,+2,+3), so we are looking at seven possible changes.
The probabilities for those events are static, and known:
(0.08,0.14,0.22,0.3,0.14,0.08,0.04), and price changes are independent for each round of changes.
Required:
- all possible prices of the stock after 20 rounds, and
- the probability for each of those prices after 20 rounds.
I would much appreciate your help! Thank you very much in advance!
0 Comments
Answers (0)
See Also
Community Treasure Hunt
Find the treasures in MATLAB Central and discover how the community can help you!
Start Hunting!