On January 1,you Forecasted That There Is a 45 Percent

Multiple Choice

On January 1,you forecasted that there is a 45 percent chance that the stock price of Edward Bear Inc.will be $95 in one year while there is a 55 percent chance that the stock price will be $35.Six months later,you revised the estimated probability to 25 percent chance of the high state (stock price of $95) .If the market agrees with your revised forecasts,what is the expected change in stock price from January 1 to July 1? Assume the discount rate is zero.

A) Price goes up by 19.35%
B) Price goes down by 19.35%
C) Price goes up by 24%
D) Price goes down by 24%