Project #7610 - Investment and Portfolio Management

Unit 3 Assignment

Connie is an economic analyst for a large investment firm in the Midwest. She has recently been given a task to determine the return of a stock, taking into account the economic conditions, their associated probabilities, and expected returns. Below is the information provided to Connie as part of this exercise:

State of Economy

Probability

Return

Good

0.1

.015

Normal

0.5

0.8

Poor

0.4

0.5

  • Using the above table information, calculate what the expected rate of return is on the stock.
  • What are some of the factors that might affect the states of the economy?

Explain the methods used typically to determine the probability of something happening like this scenario uses and its effect on a stock

Subject Business
Due By (Pacific Time) 06/16/2013 12:00 am
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