标题: Quant problem [打印本页] 作者: toocfatoo 时间: 2011-7-11 19:42 标题: Quant problem
Price per barrel of crude oil five yrs from now will range between $75-$105, Assume a continuous uniform distribution, the probability price will be less than $180 five yrs from now is closet to :
A 5.6%
B. 16.7%
C. 44.4%作者: Londonrocks 时间: 2011-7-11 19:42
I don't follow.
Continuous uniform distribution between 75-105?作者: kd26gioi 时间: 2011-7-11 19:42
16.67%
I did (105-75)/(180-0)
Edited 1 time(s). Last edit at Thursday, June 4, 2009 at 04:26PM by kh.asif.作者: mnieman 时间: 2011-7-11 19:42
It should say $80 and the answer is 16.7% range 30 80-75(lower bound) =5 5/30作者: chetan86 时间: 2011-7-11 19:42
The minimum bound on the asset price is 0 cause prices cannot be negative. So we are trying to find the probability that the asset price would be between 0 and 180.
Now, the question states that the price would range from 75-105. What I found out was,
What is the proportion of the Oil Price range of 75-105 compared to the whole range of 0-180?作者: Finalnub 时间: 2011-7-11 19:42
On the info you've given its 100%... you've defined the distribution to be between 75 and 105. I'm guessing there's a typo somewhere....
Just for anoyone looking though, if the disribution of oil price in 5 years was cont. uniform between 75 and 105, probability opf the price being less than 80 would be, the area under the curve between 80 and 75:
(80-75) / 105 - 75
=5/30
=16.67%作者: Penny-wenny 时间: 2011-7-11 19:42
I think it is a typo, that question doesnt make sense, it is asking what is prob <$180, which would be 100% given that range.作者: suyash1989 时间: 2011-7-11 19:42
range in uniform distribution problems is always in the denominator. the question is typed wrong.
