Question: Larry Lynch has been working for a year as an analyst for an investment company that specializes in serving very wealthy clients. These clients often

Larry Lynch has been working for a year as an analyst for an investment company that specializes in serving very wealthy clients. These clients often purchase shares in closely held investment funds with very limited numbers of stockholders. In the fall of 2008, the market for certain types of securities based on real estate loans simply collapsed as the subprime mortgage scandal unfolded. Larrys firm, however, sees this market collapse as an opportunity to put together a fund that purchases some of these mortgage-backed securities that investors have shunned by acquiring them at bargain prices and holding them until the underlying mortgages are repaid or the market for these securities recovers. The investment company began putting together sales information concerning the possible performance of the new fund and has made the following predictions regarding the possible performance of the new fund over the coming year as a function of how well the economy does:

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