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Free Amazon Work Simulation Questions and Answers 1

1) intermittent daily return = ln (day's price ÷ previous day's price)
2) drift = average daily return - (variance ÷ 2)

3) random value = standard deviation * NORMSINV(RAND()

4) next day's price = today's price * e ^ (drift + random value)

The likelihood that the actual return will be between the most likely ("anticipated") rate and one standard deviation is 68%, two standard deviations is 95%, and three standard deviations are 99.7%.

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