In this exercise, we will analyze the intrinsic market value of a market Index in $2023$ under five proposed states of nature, each representing a distinct economic scenario.

These states include Economic Boom, Moderate Growth, Stable Economy, Economic Slowdown, and Recession.

We will compute the market values for the Index based on variations in earnings per share $($EPS$)$ estimates.

Additionally, we will calculate the estimated rate of return under each scenario and discuss how investors might allocate the Index in their global portfolio based on their required rate of return.

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