- #1
jason_85
- 10
- 0
Hi everyone,
I realize this is only loosely related to mathematics, but I didn't know where else to ask this question (if I post it in a finance forum I'll get 100 different answers from people who probably didn't really understand the question). I think mathematicians are the kind of people I need to answer this question :)
Supposing hypothetically that I have an array of binary numbers, let's call it ℂ. We also have an array of integers, let's call it ∅. The length of these is identical.
Each number in ℂ is either "up" or "down", let's call them 1 and 0 respectively. Each value of ℂ at the ith position is a prediction about whether or not the price of some currency, stock, or commodity, let's call it STOCK, is going to be higher or lower than the price today, n days from now (where n is ith value of ∅).
So given that information, and given also the amount of cash held and the amount of STOCK currently held, what is the optimal course of action to theoretically maximise profit, assuming the following:
1) There is no difference between the sell and buy price, and there is no fee involved in buying or selling STOCK.
2) The prediction is not necessarily going to come true, but the accuracy can be assumed to exceed that of a random guess.
Is there a single solution to this problem? As far as I can tell there should be, right?
Thanks in advance :)
I realize this is only loosely related to mathematics, but I didn't know where else to ask this question (if I post it in a finance forum I'll get 100 different answers from people who probably didn't really understand the question). I think mathematicians are the kind of people I need to answer this question :)
Supposing hypothetically that I have an array of binary numbers, let's call it ℂ. We also have an array of integers, let's call it ∅. The length of these is identical.
Each number in ℂ is either "up" or "down", let's call them 1 and 0 respectively. Each value of ℂ at the ith position is a prediction about whether or not the price of some currency, stock, or commodity, let's call it STOCK, is going to be higher or lower than the price today, n days from now (where n is ith value of ∅).
So given that information, and given also the amount of cash held and the amount of STOCK currently held, what is the optimal course of action to theoretically maximise profit, assuming the following:
1) There is no difference between the sell and buy price, and there is no fee involved in buying or selling STOCK.
2) The prediction is not necessarily going to come true, but the accuracy can be assumed to exceed that of a random guess.
Is there a single solution to this problem? As far as I can tell there should be, right?
Thanks in advance :)