Question
An investor in Google is worried the latest management earnings forecast is too aggressive and the company will fall short. His favorite analyst that covers
- An investor in Google is worried the latest management earnings forecast is too aggressive and the company will fall short. His favorite analyst that covers Google is going to release his report on Google the week before the earnings announcement. Report stands for the analyst’s report, and Forecast stands for the earnings announcement.
Prior Probabilities | Conditional Probabilities |
P(Good Report) = 0.2 | P(Below Forecast | Good Report) = 0.1 |
P(Medium Report) = 0.5 | P(Below Forecast | Medium Report) = 0.4 |
P(Bad Report) = 0.3 | P(Below Forecast | Bad Report) = 0.9 |
What is the probability the earnings announcement is below the forecast? Briefly Discuss.
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Solution 11 199 B 11 64 Now 03 a Let denote good Report Medium Bod Repost Below ...
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
