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Based on this scenario analysis in Lab 5.8 Excel: Applying Scenario Analysis: T...

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Based on this scenario analysis in Lab 5.8 Excel: Applying Scenario Analysis: Trade War, what is the probability that domestic demand decreases income by 5% and there is a moderate trade war?

The table has 5 columns. Columns 3 to 5 are titled no trade war, moderate trade war and severe trade war. The values for moderate trade war across the 4 scenarios are as follow: Table 1: Income Scenarios: negative 10%; Domestic Demand Increases Income by 5%: 1,890,000; Domestic Demand Doesn't change: 1,800,000; Domestic Demand Decreases Income by 5%: 1,710,000. Table 2: Change in income based on scenario above. Income Scenarios: negative 10%; Domestic Demand Increases Income by 5%: (110,000); Domestic Demand Doesn't change: (200,000); Domestic Demand Decreases Income by 5%: (290,000). Table 3: probability of the scenario occurring Income Scenarios: negative 10%; Domestic Demand Increases Income by 5%: 0.20; Domestic Demand Doesn't change:0.15; Domestic Demand Decreases Income by 5%: 0.05. Sum: 0.40. Table 2: expected impact of changes in income due to trade war Income Scenarios: negative 10%; Domestic Demand Increases Income by 5%: (22,000); Domestic Demand Doesn't change: (30,000); Domestic Demand Decreases Income by 5%: (14,500); Sum of expected change in income: (66,500).

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