Probability Question Without Knowing the Distribution

AI Thread Summary
Determining the probability of an asset appreciating by a specific percentage, such as 5% over two years, requires knowledge of the asset's historical performance and market conditions. The type of asset significantly influences the probability calculation, as different assets have varying volatility and growth patterns. Without a known distribution, estimating this probability becomes challenging and may require advanced statistical methods or models. Contributors emphasize the importance of understanding the asset's characteristics and market context to make informed predictions. Accurate probability assessments are crucial for parties involved in financial agreements.
Drewau2005
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Hello

Thank you to the contributors on this forum.
My question is not a homework question but rather concerns an idea I have been thinking of for some time.

Suppose there are two parties to an agreement whereby one party agrees to pay the other party a sum of money, should an asset not appreciate in a value by a percetage (say 5%) over a period of time (say 2 years).

How do you work out the probability of the asset increasing value by 5% ?

Many thanks in advance

Drew
 
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Wouldn't it have something to do with what is the asset? And even then you would have to be pretty good to figure that--expecially if you had to also make a profit.
 

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