In a random walk with state space = Z and transition probabilities P(k --> k+1)=p, P(k --> k)=r, P( k --> k-1)=q with p+q+r=1, the expected number of steps before moving up is either finite or infinite depending on p, q, r. This means (applied to the stock market) that it is possible for a stock price to never surpass its present value. I am looking for a proof that someone with NO mathematical background could understand. Tthe easiest proof I have so far requires knowledge of recurrence relations and basic arithmetic (+, -, *, /). I would like to put this proof on my financial web site. The author of the proof would be acknowledged. Thank you. Vincent Granville -- http://www.datashaping.com : Advanced Trading Strategies ================================================================= Instructions for joining and leaving this list and remarks about the problem of INAPPROPRIATE MESSAGES are available at http://jse.stat.ncsu.edu/ =================================================================
