Stock prices and the experience of the manager

Assignment Help Finance Basics
Reference no: EM131572704

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. Use the information in the table to discuss the following questions.

Stock Prices Rises- Experienced: 19 Not Experienced: 53 Total: 72

Stock Prices Falls- Experienced: 33 Not Experienced: 95 Total: 128

Total- Experienced: 52 Not Experienced: 148 Total: 200

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.

Reference no: EM131572704

Questions Cloud

What do you think is lemanns attitude toward new orleans : What do you think is Lemann's attitude toward New Orleans? Does it shift in the essay? How does the inclusion of literary evidence affect readers of this essay?
Analyze criminogenic conditions using environmental theories : Analyze and report on the criminogenic conditions using environmental theories. Include at least one chart, graph, or map to illustrate the crime problem.
Prepare a corrected balance sheet for sandhill : Analyze the above information to prepare a corrected balance sheet for Sandhill in accordance with proper accounting and reporting principles
Describe the problems inherent to capitalism and socialism : How might a sociologist analyze the history of foreign military intervention from the symbolic interactionist perspective?
Stock prices and the experience of the manager : What does your answer imply about the statistical relationship between the stock prices and the experience of the manager?
How to lie with data visualization : How to Lie with Data Visualization? Create two data visualizations, one using secondary research data and one using primary research data.
What is the probability of getting : If 11 drivers are randomly selected what is the probability of getting 3 or more who were involved in a car accident last year?
According to the prevalence of disease : How does the predictive value of a screening test vary according to the prevalence of disease
Standard deviation of the sample mean : The Standard deviation of the sample mean equals 2.50. Textbooks show this answer to be true.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd