By: Sadananda Acharya Azhar Chorghay Shivankit Kumar Subhag Jain Vrishodhan Jhawar Shalaka Malade Varun Mohan Kashyap

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With EndRun's Worried Bear Fund.With EndRun's Happy Bull Fund.Š Worried Bear . you can get a four hundred percent rate of return in times of recession! Happy Bull . booming economy. Š 1/21/2011 3 . you can make twelve times your initial investment (that's a 1200 percent rate of return!) in a fast expanding.

Š Are there any ´Catchesµ about the claims the website makes for the rate of return of Happy Bull and worried Bear Funds? 1/21/2011 4 .

1 0.2 - Happy Bull 1200 600 -100 -900 10 Worried Bear -300 -200 100 400 60 1/21/2011 5 .5 0.2 0.Outcomes Fast expanding economy Expanding economy Stable Economy Recession Expected Values Probability 0.

Š For Worried Bear ² As per the expected value analysis. there is a probability of 0. there is a probability of 0.1 that worried bear is giving a rate of return of Value (-300) for the fast expanding economy. For Happy Bull ² As per the expected value analysis. Š 1/21/2011 6 .1 Happy bull is giving a rate of return of value 1200 for the fast expanding economy.

Š What subjective data influence the rate-ofreturn analysis of these funds? Could Endrun be accused of making false and misleading statements? Why or Why not? 1/21/2011 7 .

1 0.2 0.5 0.00 Worried Bear -300 -200 100 00 Expected Values - 10 60 1/21/2011 8 .2 Happy Bull 1200 600 -100 .Outcomes Fast expanding economy Expanding economy Stable Economy Recession Probability 0.

Š As per the data analysis. a candidate is investing on Happy Bull then the probability is 0. on other hand there is 0.2 of getting rate of return of value 600. but will get as per the market condition. irrespective of what market condition is. But according to possible outcome the values pertaining to both parties differs.98 chances that the investor won·t get rate of return as per the probability set by the company. Š 1/21/2011 9 . If the outcome is expanding economy. the rate of return is sure on both the investment parties.

2 10 Š Š 1/21/2011 .1. In recession.Š No. with a probability of 0. with a probability of 0. In fast expanding economy. rate of return is 1200. EndRun cannot be accused of making false and misleading statements because the claim they made about to investment companies there is a sure chances of getting rate of return . rate of return is 400.

Š The expected-return analysis seems to show that the Worried Bear fund has a greater expected return than the Happy Bull fund. Should a rational investor then never invest in the Happy Bull fund? 1/21/2011 11 .

surely Worried Bear fund has a greater expected return as compared to Happy Bull fund. A rational investor can invest based on the market situation and possible outcomes in either of this company to get maximum rate of return. Š 1/21/2011 12 .Š According to the given statistics information.

2 Expanding economy 0.5 Stable Economy 0.1 Fast expanding economy 0.2 Recession Expected Values Happy Bull Worried Bear -500 -1000 -1500 1/21/2011 13 .1500 1000 500 0 0.

Š Based on given statistics. 1/21/2011 14 . we can conclude that Worried bear is more profitable compare to Happy Bull considering the percentage of probability mentioned.

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