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?
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)
At Solution Essays, we are determined to deliver high-quality papers to our clients at a fair price. To ensure this happens effectively, we have developed 5 beneficial guarantees. This guarantees will ensure you enjoy using our website which is secure and easy to use.
Most companies do not offer a money-back guarantee but with Solution Essays, it’s either a quality paper or your money back. Our customers are assured of high-quality papers and thus there are very rare cases of refund requests due to quality concern.Read more
All our papers are written from scratch and according to your specific paper instructions. This minimizes any chance of plagiarism. The papers are also passed through a plagiarism-detecting software thus ruling out any chance of plagiarism.Read more
We offer free revisions in all orders delivered as long as there is no alteration in the initial order instruction. We will revise your paper until you are fully satisfied with the order delivered to you.Read more
All data on our website is stored as per international data protection rules. This ensures that any personal data you share with us is stored safely. We never share your personal data with third parties without your consent.Read more