ssume that if M launches a new e-trading platform, its price will go up to $261. Else, M price will go down to $62. You are aware that M shares are being traded at $162. You also know that the risk-free rate is 5%. What is the probability that M price will go down? ***Please round your answ
ssume that if M launches a new e-trading platform, its price will go up to $261. Else, M price will go down to $62. You are aware that M shares are being traded at $162. You also know that the risk-free rate is 5%. What is the probability that M price will go down? ***Please round your answ
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume that if M launches a new e-trading platform, its price will go up to $261. Else, M price will go down to $62. You are aware that M shares are being traded at $162. You also know that the risk-free rate is 5%.
What is the probability that M price will go down?
***Please round your answer to the nearest three decimals (i.e. 0.512)
Transcribed Image Text:Assume that if M launches a new e-trading platform,
its price will go up to $261. Else, M price will go down
to $62. You are aware that M shares are being traded at
$162. You also know that the risk-free rate is 5%.
What is the probability that M price will go down?
***Please round your answer to the nearest three
decimals (i.e. 0.512)
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