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The current price of DuWop (a publicly traded company) is $25. The following rules describe the random-walk behavior of price movements in the future: 1.
The current price of DuWop (a publicly traded company) is $25. The following rules describe the random-walk behavior of price movements in the future: 1. Gains and losses are equally likely (i.e., prigan)-pr(loss)-0.50). 2. Gains are equal to $2. 3. Losses are equal to $1 Calculate the likely (expected) value of the price of this stock for the next three periods. (Enter your responses rounded to two decimal places.) Pt+1 $25.50 Pt+2 Pt+3 $25 $ 26.00 S 26.00 You observe in time period 3 that the price, Pt+3, of DuWop is equal to $31. Does this imply that this particular stock does not follow a random walk? O Yes O No
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