This Question: 1 pt 8 of 31 (8 complete) This Test: 31 pts possible nex, Inc. is

Question

This Question: 1 pt 8 of 31 (8 complete) This Test: 31 pts possible nex, Inc. is a biotechnology firm that is about to announce the results of its clinical trials of a potential new cancer drug. If the trials are successful, Apnex stock. will be worth $73 per share. If the trials are unsuccessful, Apnex stock will be worth $20 per share. Suppose that the morning before the scheduled, Apnex shares are trading for $51 per share. a. Based on the current share price, what sort of expectations do investors seem to have about the success of the trials? b. Suppose hedge fund manager Paul Kliner has hired several prominent research scientists to examine the public data on the drug and make their own assessment of the drug's promise. Would Kliners fund be likely to profit by trading the stock in the hours prior to the an c. Which factors would limit the ability of Kliners fund to profi on its information? a. Based on the current share price, what sort of expectations do investors seem to have about the success of the trials? Select the best choice below. A. The market seems to believe the trials will not be successful The market seems to expect a 50% decline in the stock price. The market seems to have no clue about what wil happen to the stock price. D. The market seems to assess a somewhat greater than 50% chance of success b. Suppose hedge fund manager Paul Kliner has hired several prominen research scientists to examine the public data on the drug and make their own assessment of the drug's promise. Would Kliners fund be likely to profit by trading the stock in the hours prior to the announcement? Kliners fund would likely (Select the best choice below.) A, profit, since the data on the drug is public Click to select your answer.

Explanation / Answer

8.a) option D is right

The market is always optimistic and positive.so, we opt for option D

b) Hedge funds are made available only to certain accredited investors and cannot be offered or sold to the general public.

option C is right.

c) option B is right.

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