If the current price is 100 and the instrument does not pay, Financial Management

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If the current price is 100 and the instrument does not pay

Assume that the equilibrium return on a financial instrument is 10 percent. If the current price is $100 and the instrument does not pay interest or dividend, what is the price expected one year from now when the market is in equilibrium?

If the equilibrium return on the instrument increases to 15 percent because the instrument is perceived as more risky, what happens to the current price, assuming the expected price one year from now does not change?

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Financial Management: If the current price is 100 and the instrument does not pay

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Financial Management: If the current price is 100 and the instrument does not pay

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