Harbin Manufacturing has 10 million shares outstanding with a current share price of $23.58 per share. In one year, the share price is equally likely to be $28 or $20. The risk-free interest rate is 5%. 

a. What is the expected return on Harbin stock? 

b. What is the risk-neutral probability that Harbin's stock price will increase?

Answer rating: 100% (QA)

a Return if price go up to 28 28 2358 2358 100 1874 Return if p... View the full answer