The Stock Price of Robin Tires, Inc ​
A Construct a Spreadsheet Simulation Model That Computes the Value

Essay

The stock price of Robin Tires, Inc., listed on the Stock Exchange is currently $20. The following probability distribution shows how the price per share is expected to change over a three-month period:
​ $$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Stock Profit } \\\text { Change (\$) }\end{array} & \text { Probability } \\\hline - 3 & 0.25 \\- 2 & 0.2 \\- 1 & 0.05 \\0 & 0.15 \\+ 1 & 0.1 \\+ 2 & 0.15 \\+ 3 & 0.1 \\\hline\end{array}$$ ​
a. Construct a spreadsheet simulation model that computes the value of the stock profit in 3 months, 6 months, 9 months, and 12 months under the assumption that the change in profit over any 3-month period is independent of the change in profit over any other 3-month period.
b. With the current profit of $20 per share, simulate the profit per share for the next four 3-month periods. What is the average profit in 12 months? What is the standard deviation of the profit in 12 months?