This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.
% 1. Generate 100 (ideally 10,000 or more) 3 month long price paths for a stock with initial price $50, expected annual
% return r = 10% (=0.1) and annual volatility = 30%. Assume that there are 21 trading days in a month.
% Clearing memory and screen
s=50; %Stock's price now
mu=0.1; %Annual return rate
dt=1/252; %Time increment in years
sigma=0.3; %Annual volatility (risk)
C=; %The matrix in which each row will hold a price path
%We are creating 20000 3 month long price paths
This is only a preview of the solution. Please use the purchase button to see the entire solution