Andy Iverson at UMB.

Andy was asked to conduct analysis on a number of healthcare stocks. After discussing his assignment with Caleb, Andy starts to analyze the risk and return parameters related to Obmcare, a small healthcare firm. After an in depth analysis of the firm and the economic outlook, Andy estimates the return probabilities and historical returns that are on the Exhibit $1$ and $2$ to quantify the risk$/$return relationship for Obmcare. During the four$-$year period, Obmcare$$s expected return was $8\mathrm{.}5$ percent.