An investor owns shares in a stock whose presentvalue is

Chapter 3, Problem 3.81

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An investor owns shares in a stock whose presentvalue is 25. She has decided that she must sell herstock if it goes either down to 10 or up to 40. If eachchange of price is either up 1 point with probability.55 or down 1 point with probability .45, andthe successive changes are independent, what isthe probability that the investor retires a winner?

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