Curious hairdressers has a share price of $5 today. There are three possible states of...
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Curious hairdressers has a share price of $5 today. There are three possible states of this stock next year. There is a 30% chance the company will have a lot of success in the next year and the stock price will rise to $16. The market could expand leading to a price of $9 per share with a probability of 35%. There is also a chance that company will not be a success and the share price will drop to $2. No dividends are expected. What is the expected return of the stock?
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