please answer question 2

MGMT322 Assignment 2 1. Suppose that there are 2 possible outcomes for the annual growth rate for Turkish economy, high or low. The past data suggested that in each year of high growth, Istanbul Stock Market Index grows approximately by 10 TL, whereas in each year of low growth, it grows on average by STL. Economists believe that the probability of high growth for each year over the next 3 years is 2/3. Assuming that the economic growth process of Turkey is like a Bernoulli process, answer the following questions: a. What is the probability of Turkish economy growing at a high rate in exactly 2 years over the next 3 years? b. What is the probability of Turkish economy growing at a high rate at least 2 years? 2. Suppose that you own one share of stock of each one of 3 different companies listed on Istanbul Stock exchange. In other words, you own total of 3 shares. You put them on sale today for $5 each. You believe that the probability of selling each one of these shares at this price is . Assuming that the sale process of these 3 shares is like a Bernoulli process, answer the following: a. What is the probability of selling at most 2 shares out of these 3 shares today? b. Obtain the probability distribution of the possible earnings that you can obtain today from the sale process of these 3 shares. c. What is your EXPECTED EARNING from the sale process of these 3 shares