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Consider the trading model from the class. Let the parameters be the following: - The high and low value of a stock are vh=$116 and
Consider the trading model from the class. Let the parameters be the following: - The high and low value of a stock are vh=$116 and vl=$54 - The probability that the high value will realize is ph=0.4 - The bid and ask set by the market maker are $68.55 and $90.69. What is the fraction of uninformed traders in this market according to the market maker's expectations? (If your answer is 0.79 or 79%, then enter it as 0.79 )
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