Happy New Year 2008. Wishing you a prosperous year of 2008 and years after.
I was again playing with random numbers simulation and found everlasting properous years of Dow Jones Index in the future.
Bear in mind, this is just a rough simulation played to get rid of boredness in the first day of 2008.
The process is as follows:
- Gather Dow Jones Index daily prices since 1-Oct-1928 and calculate the mean and standard deviation.
- Using NORMINV(rand(), cumulative mean, cumulative stdev), simulate the daily return.
- Using Price n * (1 + simulated daily return), estimate Price until n equals to 1-Jan-2100.
That's it. Easy.
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