I just want to confirm that I'm on the right track to the following question,,
"A financial analyst believes that if interest rates decrease in a given period, then the probability that the stock market will go up is 0.80. The analyst further believes that interest rates have a 0.40 chance of decreasing during the period in question. Given the information, what is the probability that the market will go up and interest rates will go down during the period in question."
Please lay out step - by -step solution.
In my opinion, this is a conditional probability quiestion, and the answer is 0.32. Is this correct?
2006-10-18 12:20:23 · 1 answers · asked by VCpage 1 in Education & Reference ➔ Homework Help
Yes, it is a conditional probability question.
There is a .40 probability of interest rates going down, and a .80 probability of the interest rates going up, leaving a total .32 (.40 * .80) probability of both occurring.
2006-10-19 01:54:14 · answer #1 · answered by ³√carthagebrujah 6 · 0⤊ 0⤋