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Suppose that we wish to predict whether a certain stock, Firm A, will issue a dividend this year (Yes or No) based on x, last

Suppose that we wish to predict whether a certain stock, Firm A, will issue a dividend this year ("Yes" or "No") based on x, last year's percent profit.

We examine a large number of companies and discover that:

  • For prior probabilities, there is = 83% chance a company will issue a dividend.
  • Firm A's last year percentage profit was x = 4.
  • The estimated probability densities are as following:

= 0.09

= 0.07

Predict the probability that Firm A will issue a dividend.

Please round to 3 decimal places. Do not answer in percentage.



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