1.Considering the world economic outlook for the coming year and estimates of sales and earnings for the pharmaceutical industry to expect the rate of return for the Lauren Labs common stock to range between -20 percent and +40 percent with the following probabilities.

Probabilities

Possible returns

0.10

-.20

0.15

-0.05

0.20

0.10

0.25

0.15

0.20

0.20

0.10

0.40