Question
NoWorks stock at the end of the day is expected to be worth $100 (80% probability) or 110 (20% probability), pending a news announcement. A
NoWorks stock at the end of the day is expected to be worth $100 (80% probability) or 110 (20% probability), pending a news announcement. A dealer believes that 90% of the traders are noise traders and 10% are informed traders. The dealer is setting her ask price. At what value of the ask price does she just break even?
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Investments An Introduction
Authors: Herbert B. Mayo
13th Edition
0357127951, 978-0357127957
