Markov Chains, Markov Process, Python, Discrete Time Markov, Probability.
Let’s assume an initial value of π_0=[0.5,0.5], i.e. an equal probability of it’s closing higher (+1 state) or lower ( — 1 state) on listing day, as compared to the IPO price. If we repeatedly apply the formula for π_t=π_0*P^t, we will get the probability distribution vector π_t for each time step