Computational Notes

• Stock Symbol: is for display only. The calculator does not include or use any historical prices.
• Starting Price ($): assign any starting price.
• Projection Period (Number Months): is total number of months of projected prices.
• Average Change of Monthly Price (%): is called Trend. A negative Trend represents a price downside. A 0 Trend represents a flat price trend. A positive Trend represents a price upside. The model is particularly sensitive to the value of Trend. Increasing this value will increase the magnitude of projected prices.
• Variability of Average Change in Monthly Price (%): can be negative, 0 or positive. Increasing this value will increase the variability of projected prices.
• Random Number Seed: determines the first random component. A given seed will generate a unique sequence of random components. To generate another unique sequence of random components, enter a different seed. Enter a positive integer number.

The Stock Price Projection Calculator uses the following recursive formula that is a random walk with drift:

Where:

• Price is the new generated monthly price.
• Previous Price is the previous price.
• Random Component is a normally distributed variable with a specified mean and standard deviation. The Random Component causes the variation in computed prices. For each price the model generates a random component using the Box-Muller transform.
• The Random Component is multiplied by the Projected Variability in Average Change in Monthly Price (%).