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Certainty and uncertainty

To complete your simulated stock prices model, you will add stock prices and an expected "certain" stock price. The stock price is based on a random estimate of volatility, while the certainty column is estimated based on expected compounded rate of return (k).

You will use the formula: =Previous Row Stock Price*exp(k*1/252+Volatility*Random Estimate*sqrt(1/252)) to estimate the second day of the random stock prices in column B, and the formula: =Previous Row Certainty*exp(k*1/252) to estimate the second day of certain stocks in column C.

Deze oefening maakt deel uit van de cursus

Financial Modeling in Google Sheets

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Oefeninstructies

  • In B9 and C9, use a cell reference the starting stock price in B3.
  • Using the formula described above, fill in the the simulated stock price in B10 and the certain stock price in C10.
  • Copy the formulas from row 10 through row 159.

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