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this focusing on achieving the objecting of the organization
The probability of profit for this investment opportunity is the likelihood that you will make money from it.
C) What is the goal of the firm? Discuss how to measure achievement of this goal?
premium=(1-Recovery Rate)*(probability of default) so if the premium is 15% and the recovery rate is 30%, then you can calculate the likelihood or probability of default. It would be (.15)=(1-.30)*probability Rearranging terms you get: probability=.21428 The Recovery Rate is the percentage of your original asset you'd recover under the default circumstance.
In Problem formulation method ,goal is a parameter to provide which (goal) is formulated in goal formulation method.that's why problem formulation must follow goal formulation. suacsecu