In 44 of the 70 years from 1939 through 2008 a certain stock market finished hig
ID: 2922621 • Letter: I
Question
In 44 of the 70 years from 1939 through 2008 a certain stock market finished higher after the first week of trading. In 40 of those 44 years, this market finished higher for the year. The following table gives the first-week and annual performance of the market over this 70-year period. Use the table to answer (a) through (c) below. ANNUAL PERFORMANCE FIRST WEEK Higher Lower Higher 40 13 Lower 4 13 a. If a year is selected at random, what is the probability that the market finished higher for the year? 7571 (Round to four decimal places as needed.) b. Given that the market finished higher after the first week of trading, what is the probability that it finished higher for the year? (Round to four decimal places as needed.)Explanation / Answer
a. Probability that the market finished higher for the year
= (40 + 13) / (40 + 4 + 13 + 13)
= 0.7571
b. Probability that the market finished higher for the year given that it finished higher in the first week
= 40 / (40 + 4)
= 0.9091