Question
Assume that the BNM stock is currently overpriced, and you expect the price to go back to the equilibrium level at time 2. Under these
"Assume that the BNM stock is currently overpriced, and you expect the price to go back to the equilibrium level at time 2. Under these conditions, the average expected rate of return for this two-year period (i.e., from t=0 to t=2) would be higher than the required rate of return of the stock." True or false?
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Introduces Quantitative Finance
Authors: Paul Wilmott
2nd edition
470319585, 470319581, 978-0470319581
