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Probability Question
Hello there!!!
I wonder if anyone familiar with the probability theory can help me to clarify the following. There is trading system which generates a winning trade per ONE stock in ONE month’s time with a probability of 5/12 (0,4166%). If the system trades 10 independent stocks the probability of any number of winning trades occurring out of all of them in ONE month is shown below: None 0,0046 One 0,0326 Two 0,1047 Three 0,1995 Four 0,2494 Five 0,2172 Six 0,1272 Seven 0,0519 Eight 0,0139 Nine 0,0022 Ten 0,0002 I took these values from a book…I tried to reproduce these values in the spreadsheet that I attached. My table looks as follows: 0 0,0046 1 0,0033 2 0,0023 3 0,0017 4 0,0012 5 0,0008 6 0,0006 7 0,0004 8 0,0003 9 0,0002 10 0,0002 As you see the first and the last values agree but the rest do not. I was multiplying the probability of each of the 10 different trade probabilities by each other and got such small results unlike the author…Do you think you can help me to recreate the logic that the author used to generate his table of the probabilities? Thanks a lot!!! I attach the excerpt from the book and the spreadsheet D |
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Posted to microsoft.public.excel.misc
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Probability Question
zealot -
The binomial distribution seems appropriate. Enter 0,1,2,...,10 in cells A1:A11. In cell B1 enter =BINOMDIST(A1,10,5/12,FALSE) and copy down to B11. - Mike http://www.mikemiddleton.com "zealot" wrote in message ... Hello there!!! I wonder if anyone familiar with the probability theory can help me to clarify the following. There is trading system which generates a winning trade per ONE stock in ONE month’s time with a probability of 5/12 (0,4166%). If the system trades 10 independent stocks the probability of any number of winning trades occurring out of all of them in ONE month is shown below: None 0,0046 One 0,0326 Two 0,1047 Three 0,1995 Four 0,2494 Five 0,2172 Six 0,1272 Seven 0,0519 Eight 0,0139 Nine 0,0022 Ten 0,0002 I took these values from a book…I tried to reproduce these values in the spreadsheet that I attached. My table looks as follows: 0 0,0046 1 0,0033 2 0,0023 3 0,0017 4 0,0012 5 0,0008 6 0,0006 7 0,0004 8 0,0003 9 0,0002 10 0,0002 As you see the first and the last values agree but the rest do not. I was multiplying the probability of each of the 10 different trade probabilities by each other and got such small results unlike the author…Do you think you can help me to recreate the logic that the author used to generate his table of the probabilities? Thanks a lot!!! I attach the excerpt from the book and the spreadsheet D +-------------------------------------------------------------------+ |Filename: probability.zip | |Download: http://www.excelbanter.com/attachment.php?attachmentid=85| +-------------------------------------------------------------------+ -- zealot |
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