The value of imperfect forecasting ability

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Portfolio managers Martin and Krueger each manage $3.6 million funds. Martin has perfect foresight, and the call option value of his perfect foresights is $540,000. Kreuger is an imperfect forcaster and correctly predicts 50% of all bull markets and 57% of all bear markets. The value of Kreuger's imperfect forecasting ability is

Reference no: EM13951862

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