Problem 1 Suppose that each day the price of a stock moves up 1/8th of a point with probability 1/3 and moves down 1/8th of a point with probability 2/3 If the price fluctuations from one day to the next are independent, what is the probability that after six days the stock has its original price? [Hint: Use the binomial]
Problem 2 Suppose we draw cards at random and with replacementfrom a standard deck of 52 cards successively until we draw an Ace
(a) What is the probability that this occurs on the 5th draw?
(b) What is the probability that at least 10 draws are needed?
(c) What is the probability that between 3 and 7 draws (inclusive) are needed?