A T-Bil 1 is priced today at $108.3333 and it has a face value of $130 and maturity of 1 year. Also, a stock from company ABC is traded in the market today at $116.6667. The expected value for a stock XYZ is $260 and $200 in scenarios 1 and 2 respectively. 

 Stock Prices Expected for ABC in 1 year

Company                            ABC

Scenario 1                          $170

Scenario 2                          $120

Calculate:

a) Probability Scenario 1 and 2

b) Price today for Stock XYZ

Answer rating: 100% (QA)

SOLUTION a To find the probability of scenario 1 and 2 we need to find the probabilit... View the full answer