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An investor purchases a share of Synovous Bank stock this morning for $2.80. The investor believes the economy will take one of three conditions in
An investor purchases a share of Synovous Bank stock this morning for $2.80. The investor believes the economy will take one of three conditions in the coming year, and each condition will have an impact on the selling price of the stock. The investors beliefs about the economy are shown below:
OUTCOME: | Probability | Synovous Price in One Year |
---|---|---|
Bad for Banks | 0.31 | $2.57 |
Moderate for Banks | 0.31 | $2.91 |
Good for Banks | 0.38 | $3.49 |
What is the expected return if you invest in Synovous stock today (based on the investors assumptions)?
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