Question

Problem 2: 2. You are given different scenarios for the rates of returns for Intek and...

Problem 2:

2. You are given different scenarios for the rates of returns for Intek and Zurick stocks.

Scenario

Probability

Return (Intek)

Return (Zurick)

Boom

0.35

12%

6%

Normal

0.25

2%

4%

Recession

0.4

-4%

-1%

  1. What is the probability that returns will be lower or equal to 2% for Intek?

  1. What is the probability that returns will be higher than 2% for Intek?

  1. What is the probability that returns will be higher than 4% for Zurick?
  1. Compute the expected return for each stock.
Math   Statistics-And-Probability   
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