The Price of a Stock Is Uniformly Distributed Between $30

question 75

Short Answer

The price of a stock is uniformly distributed between $30 and $40.
a.What is the probability that the stock price will be more than $37?
b.What is the probability that the stock price will be less than or equal to $32?
c.What is the probability that the stock price will be between $34 and $38?
d.Determine the expected price of the stock.
e.Determine the standard deviation for the stock price.

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Definitions:

Tax Effect

The impact of tax laws on the financial performance of a business, influencing its net income and cash flow.

Depreciation Schedule

A table that outlines the annual depreciation expenses for an asset over its useful life.

Profitability Index

A financial ratio that measures the relative profitability of an investment, calculated by dividing the present value of future cash flows by the initial investment cost.

Net Present Value

The gap between cash inflows' present value and cash outflows' present value during a certain period.