What will happen to the current price

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Reference no: EM131209396

Assume the equilibrium return on a financial instrument is 10 percent, and the instrument pays no dividends or interest.

If the current price is $100 and the expected future price one year from now just increased from $110 to $120, what will happen to the current price?

What if the expected future price decreases from $110 to $100?

Reference no: EM131209396

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