## Lesson 14: Random Variables and Stock Market Simulation

March 11, 2019

Review:

- Probability Models
- Dice Simulation
- Portfolio due Wed
- Lessons 7-10,12-14 (7 lessons total, including today)
- Min 2 pages, Max 4 pages

Presentation:

- Random Variables
- Discrete Random Variables
- Probability distribution table
- Dice Simulation

- Continuous Random Variables
- Area under a density curve (e.g., Normal Curve)
- Stock Market Simulation

- Discrete Random Variables

Assignment:

- Watch Video from Unit 20 – Random Variables
- Create a Stock Market Simulation in Sheets using the Monthly return data
- Calculate the number of months until your 65th birthday
- Generate a simulation with the number of months calculated in step 1.
- Use $10,000 as your starting balance
- Run a test simulation (or a few) to be sure the numbers are making sense
- When ready, run the simulation 30 times and save the ending balance from each simulation (you’ll have 30 separate ending balances).
- Calculate the mean and standard deviation of your n=30 ending balances
- Make a histogram of your ending balances
- Create a portfolio slide summarizing your results