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Technology Stocks : How high will Microsoft fly?
MSFT 486.70-1.4%3:17 PM EST

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To: DavidD who wrote (12652)11/28/1998 7:16:00 AM
From: Reginald Middleton  Read Replies (1) of 74651
 
<Also, I always said the risk for MSFT losing equity was small, but REAL as well. I am not able to quantify the risk adjusted return for this unlikely event because I can't make a reasonable assumption of the likelihood the stock nose dives. Never by a bio-tech stock just before a FDA review - one can't reasonably quantify the response of the all important panel>

Over time, the market prices this risk into the funding mechanisms. You said you were well versed in finance, well how does the market quantify the risk of treasuries, investment grade corporates, high yield bonds, and emerging market debt? Yoou extrapolate the markets risk premium for equities in a similar fashion.
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