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Creating a list of random #s with bounds

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  1. #1
    Registered User
    Join Date
    11-12-2010
    Location
    NYC
    MS-Off Ver
    Excel 2003
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    19

    Creating a list of random #s with bounds

    Hi,

    I'm looking to create the following graph:

    I have a year-to-date set of prices for a given stock and am trying to create a graph that will get me to the end of the year with a predetermined price in mind.

    So say for example I have data up until 3/1/2011. I know that at the end of the year, my price is going to be $100. I want to create a list of #s that will eventually get me to 100 but won't look like a sloped increase i.e. a straight line, and also keep in mind my price can't jump up/down that much (has to stay within reason of past pricing standard deviation). Anyone have any ideas?

  2. #2
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    02-11-2011
    Location
    Toronto, Canada
    MS-Off Ver
    Excel 2013
    Posts
    98

    Re: Creating a list of random #s with bounds

    get historical return and sigma values

    then you do this...

    =mu*dt+(sigma*(dt^.5)*norminv(rand(),0,1)))

    mu=expected return
    sigma=stdev
    dt=change in time, [for ex... monthly dt=(1/12)]

    run that down for a whole yr

    paste values and graph it

  3. #3
    Registered User
    Join Date
    11-12-2010
    Location
    NYC
    MS-Off Ver
    Excel 2003
    Posts
    19

    Re: Creating a list of random #s with bounds

    Thank you

    seems to be working but but the graph looks extremely volatile (pls see attached). Is there a way to skew the data into an upward direction somehow?
    Attached Files Attached Files

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