Question
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 straight pi subscript yes = 86% chance a company will issue a dividend.
Firm A's last year percentage profit was x = 4.
The estimated probability densities are as following:
fyes(4) = 0.08
fyes(4)= 0.05
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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