14. Using the model described in the text, calculate the appropriate bid-ask spread for a dealer making

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14. Using the model described in the text, calculate the appropriate bid-ask spread for a dealer making a market in a security under the conditions that 15% of all traders are information-motivated and there is a 30% chance that the stock is worth $30 per share and a 70% change that it is worth $50 per share.

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Investments

ISBN: 9788120321014

6th Edition

Authors: William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey

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