An investor has to choose between stocks A&B, each selling for $10. Stock A, can either increase in price to $12, with a 50% probability, or stay at $10 with a 50% probability. Stock B can either increase in price to $15 with a 50% probability or go down to $7 with a 50% probability. Which of the stocks would the investor choose?

Answer rating: 100% (QA)

Expected price p1 P2p2 P2 pprobability of price and ... View the full answer