China’s stock markets are tumbling. A three week’s plunge has knocked off about 5%, 6%, and 7% weekly Chinese shares. Investors are concerned and many of them have borrowed to be able to continue playing in the stock market. Two newspapers are estimating tomorrow’s chances for the Chinese shares. The first newspaper estimates the shares will go down as low as 8%. The second newspaper estimates that the Chinese shares will turnaround with an increase of 2%.

a. What approach of probability assessment is used by the newspapers?

b. How did the newspapers make their estimations?

c. Why did the two newspapers provide two different judgments by using the same probability assessment approach?