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by civilized
1044 days ago
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It's exactly like a random walk... with downward drift. If you take the log of the wealth, the steps are: log(1.5) = 0.18, log(0.6) = -0.22. So at each step, there's a 50% chance you go up 0.18, and a 50% chance you go down 0.22. Random walks with downward drift don't inevitably go up arbitrarily high like ones without drift. |
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