19. Suppose that you are a trader at the stock market. T-Mobile's stocks currently trade at $45 and the expected return is 9%. You have information that leads you to believe that by the end of year the company's returns will be around 40%. Are your expectations optimal? How will your behavior influence the stock price?
19. Suppose that you are a trader at the stock market. T-Mobile's stocks currently trade at $45 and the expected return is 9%. You have information that leads you to believe that by the end of year the company's returns will be around 40%. Are your expectations optimal? How will your behavior influence the stock price?
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter9: The Financial Markets And The Economy: The Tail That Wags The Dog
Section: Chapter Questions
Problem 2DQ
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Question
![orse of than
the rest of the firm's clients?
19. Suppose that you are a trader at the stock market.
T-Mobile's stocks currently trade at $45 and the expected
return is 9%. You have information that leads you to believe
that by the end of year the company's returns will be
around 40%. Are your expectations optimal? How will your
behavior influence the stock price?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3983cf71-e5bd-469b-804f-97fbd825855c%2Fdf45ba2b-90b7-4c64-a9eb-8cac40605a6a%2F5pg9cw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:orse of than
the rest of the firm's clients?
19. Suppose that you are a trader at the stock market.
T-Mobile's stocks currently trade at $45 and the expected
return is 9%. You have information that leads you to believe
that by the end of year the company's returns will be
around 40%. Are your expectations optimal? How will your
behavior influence the stock price?
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