Probability of selling a stock higher than you bought it

1. Aug 21, 2010

moonman239

1. The problem statement, all variables and given/known data
I buy a stock at Apple Inc. History shows that the average daily stock price is $297 with a variance of$5. If I buy a stock at $300, what is the probability that after 10 years I will be able to sell the stock at at least that price? 2. Relevant equations 3. The attempt at a solution I know of one way to solve this problem: Gaussian distribution. I know that I can calculate the probability of$300, $301,$302,...$n with a simple equation. I just want to know if there is another way of doing it. 2. Aug 22, 2010 HallsofIvy Yes, use Gaussian distribution. But why calcuate "$300, $301,$302, ..." separately? Any good table of the normal distribution will give you the probability that "x> 300" directly. What did you get for the "standard normal" variable for x= 300?

(Since you are using the "historic" values, the "10 years" you owned the stock is irrelevant.)

Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook