Question: Luna is an active mutual fund manager. She uses a binomial model to estimate a price target for three stocks that she currently owns. Here

Luna is an active mutual fund manager. She uses a binomial model to estimate a price target for three stocks that she currently owns. Here are the price targets and market prices for each stock:

Stock Price Target Market Price

AA $230 $200

BB $210 $170

CC $435 $400

If Luna sells one of the three stocks in her portfolio, which one should she sell and why?

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