Four analysts cover the stock of Deng Chemical. One forecasts a 7% return for the coming year.

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Four analysts cover the stock of Deng Chemical. One forecasts a 7% return for the coming year. The second expects the return to be 5%. The third predicts a 24% return. The fourth expects a 10% return in the coming year. You are relatively confident that the return will be positive but not very large, so you arbitrarily assign probabilities of 35%, 35%, 5%, and 25%, respectively, to the analysts’ forecasts. Given these probabilities, what is Deng Chemical’s expected return for the coming year?

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Principles Of Managerial Finance Brief

ISBN: 9781292267142

8th Global Edition

Authors: Chad J. Zutter, Scott B. Smart

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