Find approximate probability that stock price hasn-t dropped


Suppose that you own shares of stock in the company Lewser, Inc. Suppose that the current (initial) stock price is $100 per share. Suppose that we regard the daily changes in stock price as independent and identically distributed random variables (a simple additive random walk model). Suppose that the expected daily change is ¡$0:10 or ¡10 cents per day (as one would expect from a stock with that name). Using units of dollars, suppose that the variance of the daily change is 0:25. Suppose that the distribution of the daily change is a gamma distribution. What is the approximate probability that the stock price has not dropped (is at least $100) after 100 days?

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Operation Management: Find approximate probability that stock price hasn-t dropped
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