What is the probability that the price of a stock

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Imagine you are a financial analyst at an investment bank. According to your research of publicly traded companies, 60% of the companies that increased their share price by more than 5% in the last three years replaced their CEOs during the period. At the same time, only 35% of the companies that did not increase their share price by more than 5% in the same period replaced their CEOs. You estimate the probability that the price of any stock grows by more than 5% to be 0.04.

a. What is the probability that the price of a stock does not grow by more than 5%?

b. Find the probability that the shares of a company that replaced its CEO will increase by more than 5%.

c. Find the probability that the shares of a company that did not replace its CEO will increase by more than 5%.

Reference no: EM133032937

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