Gateway and Micron are computer stocks that frequently move together because they represent the same sector of the economy. During a 25 day period, the value of Gateway stock went up 17 days. On 10 of these 17 days, the value of Micron stock also went up. On the 8 days when Gateway stock did not go up, Micron stock went up on 2 of these days.
If Micron goes up, what is the conditional probability Gateway goes up?
If Micron does not go up, what is the conditional probability Gateway will go up?
2006-11-21 05:43:11 · 1 answers · asked by Anonymous in Science & Mathematics ➔ Other - Science
The conditional probability is the likelihood of an event, given the occurrence of another event. It is usually written,
p(A|B)
which is read as "the probability of A, given B." This conditional probability assumes B has happened.
In your problem, assuming Micron goes UP, then on 10 of 17 days, Gateway goes up. Thus the probability of Gateway going up, given Micron going up, is 10/17.
Similarly, p(Gateway up | Micron not up) = 2/8.
The key is, you take the first event as given and go from there.
2006-11-21 05:58:23 · answer #1 · answered by Jamestheflame 4 · 0⤊ 0⤋