The increase or decrease in the price of a stock between the

The increase or decrease in the price of a stock between the beginning and the end of a trading day is assumed to be an equally likely random event.

What is the probability that a stock will show a decrease in its closing price in ten consecutive days?

Solution

The increase or decrease in the price of a stock between the beginning and the end of a trading day is assumed to be an equally likely random event.
P(increase) = P(decrease) = 1/2

What is the probability that a stock will show a decrease in its closing price in 10 consecutive days?

Answer:: (1/2)^10 = 0.000976562