1.GM stock currently trades at $15. Risk-free rate is 1%. Consider the following probability space...
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1.GM stock currently trades at $15. Risk-free rate is 1%. Consider the following probability space with the corresponding price for GM stock:
Scenario: Probability: GM price:
Life is good 0.6 $14
Ouch! 0.4 $6
What's the expected return for GM stock?
2.
GM stock currently trades at $15. Consider the following probability space with the corresponding price for GM stock:
Scenario: Probability: GM price:
Life is good 0.6 $14
Ouch! 0.4 $6
What's the expected volatility for GM stock?
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