The Stock Price of Robin Tires, Inc

question 33

Essay

The stock price of Robin Tires, Inc., listed on the Stock Exchange is currently $20. The following probability distribution shows how the price per share is expected to change over a three-month period:
a. Construct a spreadsheet simulation model that computes the value of the stock profit in 3 months, 6 months, 9 months, and 12 months under the assumption that the change in profit over any 3-month period is independent of the change in profit over any other 3-month period.
b. With the current profit of $20 per share, simulate the profit per share for the next four 3-month periods. What is the average profit in 12 months? What is the standard deviation of the profit in 12 months?

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Definitions:

Exocytosis

A process by which cells release substances to the external environment by vesicles fusing with the plasma membrane.

Secretory Vesicles

Membrane-bound vesicles containing substances that are to be secreted or transported out of the cell.

Plasma Membrane

The biological membrane that separates the interior of all cells from the outside environment, regulating the passage of substances in and out of cells.

Receptor-Mediated Endocytosis

A process by which cells internalize molecules (e.g., hormones, nutrients) by the inward budding of plasma membrane vesicles containing proteins with receptor sites specific to the molecules being internalized.