There are two possible stock market outcomes for next month - rising 5% or dropping 2%.

You surmise that the probability of the market rising is 55%, whereas there is 45% chance it will drop.

You can pay a market expert to provide advice, however, to help you decide what to do.

Based on past work, the expert has predicted a rising market and was correct 80% of the time.The expert predicted a losing market and was correct 70% of the time.

Create dynamic worksheet to calculate all 4 posterior probabilities incorporating the expert's work.

Explain why the posterior probability for a rising market is so much higher if the Expert predicts this outcome.