The correct answer is 0.0098.
Using the formula you provided, the answer would be:
P(x) = 11! / 11! (11-11)! (0.5)^11 (0.5)^(11-11) = 0.0098
The increase or decrease in the price of a stock between the beginning and the end of a trading day is assumed to be an equally likely random event. What is the probability that a stock will show a decrease in its closing price on eleven consecutive days?
(Round to four decimal places)
So I was given the formula P(x)= n! / x! (n-x)! π^x (1-π)^n-x
I got these values
n=11
x = 11
π = 0.5 since P(increase) = P(decrease) = 1/2
I used the formula above but got the incorrect answer. Can i get some help with this problem? Thanks.
1 answer
1 answer