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Problem of the Day #295: It’s a Bull Market January 8, 2012

Posted by Saketh in : potd , trackback

Bessie is planning to go off to cowllege next year. Farmer John can only pay for some of it, so she has taken to investing in the stock market to earn the rest. Bessie puts all her money in a stock with value $1000$ coins.

Each day, the price of the stock either increases or decreases by $1$ coin. It is twice as likely to go up as it is to go down. If Bessie will sell the stock when its value hits either $2000$ coins or $500$ coins, how long is she expected to keep it?

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