Experience vs. Stock Price
Discussion Prompt: An investment firm looked at 200 mergers between small companies and found that 128 of the new (merged) company’s stock price dropped immediately after the merger. They also determined that 19 of the companies whose stock rose in price had merger managers with experience from prior mergers.
The investment firm completed a contingency table based on their analysis.
Experienced Not Experienced Total
Stock Price Rises 19 53 72
Stock Price Falls 33 95 128
Total 52 148 200
Use the information in the table to discuss the following questions:
Does knowing if the merger manager has prior experience help the investment firm determine which mergers to invest in?
Why?
What does your answer imply about the statistical relationship between the stock prices and the experience of the manager?
Use the relationship between marginal, joint and conditional probability from this week’s lesson to justify your answers. Be sure to include the probabilities used to support your answer.
(Minimum word count for initial post = 150 words. Maximum word count = 250)
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more