Concept explainers
Day Trading Day traders typically buy and sell stocks (or other investment instruments) during the trading day and sell all investments by the end of the day. Exercises 63 and 64 are based on the following table, which shows the closing prices on September 22, 2015, of 12 stocks selected by your broker, Prudence Swift, as well as the change that day.22
Tech Stocks | Close | Change |
AAPL (Apple) | $113.40 | –1.81 |
ADBE (Adobe Systems) | $84.66 | 1.34 |
EBAY (eBay) | $25.61 | –0.31 |
MSFT (Microsoft) | $3.90 | –0.21 |
S (Sprint) | $4.40 | 0.02 |
WIFI (Boingo Wireless) | $8.51 | 0.56 |
Non-Tech Stocks | ||
ANF (Abercrombie & Fitch | $21.81 | –0.02 |
B (Boeing) | $133.99 | –2.03 |
F (Ford Motor Co.) | $13.91 | –0.40 |
GE (General Electric) | $25.10 | 0.01 |
GIS (General Mills) | $57.12 | 0.33 |
JNJ (Johnson & Johnson) | $93.26 | 0.13 |
OnthemorningofSeptember22,2015, Swift advised you to purchase a collection of three tech stocks and two non-tech stocks, all chosen at random from those listed in the table. You were to sell all the stocks at the end of the trading day. a. How many possible collections are possible?
a. How many possible collections are possible?
b. You tend to have bad luck with stocks—they usually start going down the moment you buy them. How many of the collections in part (a) consist entirely of stocks that declined in value by the end of the day?
c. Using the answers to parts (a) and (b), what would you say your chances were of choosing a collection consisting entirely of stocks that declined in value by the end of the day?
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Chapter 7 Solutions
Finite Mathematics and Applied Calculus (MindTap Course List)
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