Question 268871: a financial analyst believes that if interest rate 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 above information, what is the probability that the market will go up and interest rate go down during the period in question.
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! a financial analyst believes that if interest rate 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 above information,
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what is the probability that the market will go up and interest rate go down during the period in question.
Prob(market up) = 0.8
Prob(interest down) = 0.40
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P(m up and i down) = 0.8*0.4 = 0.32
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Cheers,
Stan H.
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