Question
Help me this case please 1.A relative just gave you 100 shares of GE stock. If you sold it today, you would receive $1,300. After
Help me this case please
1.A relative just gave you 100 shares of GE stock. If you sold it today, you would receive $1,300. After doing some research you have concluded that the stock will be worth 30 a share 1 year from now if the economy fully recovers, $5 a share if we slip back into recession, and will remain worth $13 a share if the economy remains the same as now. You believe the chances of the economy fully recovering to be 35%, 55% that the economy will be the same as now, and 10% that it will be worse than today.
a.Should you sell your stock now or keep it until next year to maximize the dollar amount you receive when you sell it?
b.How much would you expect to receive a year from now if you hold onto the stock?
c.How sure are you of this number? How could you quantify this?
Thank you so much
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