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Unformatted text preview: as its price is too low [leading to a high E(ROR)]. The price needs to increase to lower the E(ROR) to 12.74%. Note: Parts (a)-(c) are based on an implicit assumption that the investor is using the historical estimates to invest today. A (sensible) investor would not use the historical estimates in analyzing a forward-looking ivestment...
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This note was uploaded on 07/17/2010 for the course UGBA 18195 taught by Professor Johngonzales during the Summer '10 term at University of California, Berkeley.
- Summer '10