11. Suppose that currently it is a bull market, and in the stock market, share prices are...
Question:
11. Suppose that currently it is a bull market, and in the stock market, share prices are rising. Furthermore, suppose that the Nasdaq Composite index closes at higher points 86% of the trading days. Iniko is a Nasdaq financial expert, and when she predicts that the Nasdaq Composite index closes at a lower or equal point the next trading day, her forecast will turn out to be true 90% of the time. However, her prediction is confirmed only 75% of the time that the Nasdaq Composite index closes at a higher point the next trading day. Tomorrow is a trading day, and Iniko has predicted that the Nasdaq Composite index will close at a higher point than it did last time.What is the probability that her prediction will turn out to be true?
Step by Step Answer:
Fundamentals Of Probability With Stochastic Processes
ISBN: 9780429856273
4th Edition
Authors: Saeed Ghahramani