Question
On January 1, Coronado Inc. completed its analysis of the prospects for the Geriatric Toy Store and concluded that there was a 15-percent chance the
On January 1, Coronado Inc. completed its analysis of the prospects for the Geriatric Toy Store and concluded that there was a 15-percent chance the stock price would be $130 in one year and an 85-percent chance the stock price would be $180. Six months later, Coronado Inc. revised its estimated probabilities to a 30-percent chance of a stock price of $130 and a 70 percent chance of $180. If the market agrees with Coronado Inc.s revised probabilities, what is the expected change in stock price from January 1 to July 1? Assume the discount rate is zero. (Round answer to 2 decimal places, e.g. 15.25.)
Expected change in stock price will _______ (increase or decrease) of _________ $ .
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