1. As a follow on to the prior problem, assume that the investment committee determined the probabilities below:

Probability the competitor will response 30%, will not respond 70%

Probability of each economic state over the six year horizon Weak 15%., Normal 60% and Strong 25%

Please complete the table of joint probabilities (by multiplying the economy probability by the competitor response probability) below and then calculate the expected net present value.

Competitor Weak Normal Strong Response Economy Economy Economy Yes No