An Analyst Estimates That the Year-End Price of a Stock

question 14

Multiple Choice

An analyst estimates that the year-end price of a stock has the following probabilities: The stock's expected price at the end of the year is _______.

• A)$87.50
• B)$88.50
• C)$89.00
• D)$90.00

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Definitions:

Fair Value

An estimate of the price at which an asset could be bought or sold in a current transaction between willing parties, not in a forced or liquidation sale.

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares of stock rather than cash.

Stock Splits

Corporate actions that increase the number of shares outstanding, reducing the price per share but not changing the company's overall market capitalization.