Q. Due to global uncertainty and geopolitical impact and anticipating recession in the waster countries, it is assumed that HUL may delivery the return based on the Indian Economic Condition. RBI projected the Indian Economic growth as follows.Projected Indian Economic Condition Probability of occurrence Possible Return from HUL (in %) Extremely Good10%22% Good20%18% Average40%15% Poor20%8% Severely Poor10%4% In this situation, if we invest in HUL, how much return can be expected? Also, suggest the possible risk involved in this investment.

Given: Projected Indian Economic Condition Probability of occurrence Possible Return from HUL (in…

Answered: Due to global uncertainty and…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 2E

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Q. Due to global uncertainty and geopolitical impact and anticipating recession in the waster countries, it is assumed that HUL may delivery the return based on the Indian Economic Condition. RBI projected the Indian Economic growth as follows.

Projected Indian Economic Condition	Probability of occurrence	Possible Return from HUL (in %)
Extremely Good	10%	22%
Good	20%	18%
Average	40%	15%
Poor	20%	8%
Severely Poor	10%	4%

In this situation, if we invest in HUL, how much return can be expected? Also, suggest the possible risk involved in this investment.

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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