motivated by email
Here's what we want to do:
 Download ten years worth of daily prices for some stock, say GE.
 Generate a distribution of daily returns, like Figure 1.
 Apply this distribution of returns to a fictitious stock whose current price is, say $10.
This fictitious stock has nothing to do with GE stock.
Its evolution in time just uses the GE return distribution.
 Pick a number of days into the future, say 30.
 Select 30 returns at random, from the return distribution
(as in Fig. 1).
 See what happens to your $10 stock, after 30 days.
 Repeat steps 5 and 6 a jillion times and generate a probability distribution of prices, 30 days in the future.
 Figure 1 
>And that's exact?
Are you kidding? To be exact you'd need this.
It's an estimate of a future stock price assuming the historical return distribution of GE stock is relevant.
Now that you have an estimate ...
>Is there a spreadsheet?
Yes. Patience!
Having an estimate of a future price such as Figure 2, you might use it to estimate the value of a stock option, for example.
In Fig. 2, the red dot is the current price that you've entered.
>Options?
BlackScholes says:
Call Premium = S*NORMSDIST((LN(S/K)+(R+V^2/2)*T)/(V*SQRT(T)))
 K*EXP(R*T)*NORMSDIST((LN(S/K)+(R+V^2/2)*T)/(V*SQRT(T))V*SQRT(T))

 Figure 2 
>Huh?
The various parameters involved are explained here and ...
>And the spreadsheet?
>That's so confusing that ...
There's an Explain sheet which looks like this.
>What about that option stuff?
Yeah, it's there, too ... and looks like this:
You stick in the Strike Price etc. and it calculates the option premium (a la BlackScholes).
You also get the probability of achieving some Wishedfor Stock Price.
In Fig. 3, that's the Breakeven stock price, namely Strike + Premium
... and the probability of achieving this in 30 days is 34.7%.
>And that's exact?
Of course! Would I lie to you?
 Figure 3 
for Part II
