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4. A company that is about to announce the results of its clinical trials of a new product. If the trials are successful, the stock

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4. A company that is about to announce the results of its clinical trials of a new product. If the trials are successful, the stock will be worth $70 per share. If the trials are unsuccessful the stock will be worth $18 per share. Suppose on that morning before the results are released the shares are trading for $55 per share. What sort of expectations do investors have about the success of the trials? (15)

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