Question
On January 1, Martinez Inc. completed its analysis of the prospects for the Geriatric Toy Store and concluded that there was a 20. percent chance
On January 1, Martinez Inc. completed its analysis of the prospects for the Geriatric Toy Store and concluded that there was a 20. percent chance the stock price would be $210 in one year and an 80-percent chance the stock price would be $260. Six months later, Martinez Inc. revised its estimated probabilities to a 35-percent chance of a stock price of $210 and a 65 percent chance of $260. If the market agrees with Martinez In's revised probabilities, what is the expected change in stock price from January 1 to July 1? Assume the discount rate is zero. (Round answer to 2 decimal places, e.g. 15.25.)
Expected change in stock price of$
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