Hi everyone My boss has given my team a small simulation which I think is related to this CA2. The assignment is to simulate a stock price for a year (365 days). The stock price is assumed to change in value in the range of -2% to 2%. 1000 simulations are required. Then, calculated the highest, lowest, mean, median of the simulations for a year. I just wonder if we calculate: 1. The highest, lowest, mean, median of price movement for each day then calculate the highest, lowest, mean, median stock prices for the year; or 2. Just the highest, lowest, mean, median of the simulated stock prices at the end of the year. Thank you very much for your help.
Before you ask about results, you need to ask more about this model. What is the distribution of returns to be? Also, it is of course your duty to point out that this model will have a number of drawbacks, not least being wrong! But to actually answer your question, I'd say you want to provide the summary statistics of the 1000 final stock prices.
