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A data analyst attempting to predict a tech company's earnings in the year of 2024 believes that the tech's business is quite sensitive to the level of interest rates. He believes that, if the average interest rates in the year of 2024 are more than 1% higher than this year, the probability of significant earnings growth is 0.1. If the average interest rates in the year 2024 are more than 1% lower than this year, the probability of significant earnings growth is estimated to be 0.8. If the interest rates for year 2024 are within 1% of this year's rates, the probability for significant earnings growth is at 0.5. The data analyst estimates that the probability is 0.25 that the average interest rates in the year 2024 will be more than 1% higher than this year and 0.15 that they will be more than 1% lower than this year. If the company exhibits significant growth, what is the probability that the average interest rates will have been more than 1% higher than in the current year?

A data analyst attempting to predict a tech company's earnings in the year of 2024 believes that the tech's business is quite sensitive to the level of interest rates. He believes that, if the average interest rates in the year of 2024 are more than 1% higher than this year, the probability of significant earnings growth is 0.1. If the average interest rates in the year 2024 are more than 1% lower than this year, the probability of significant earnings growth is estimated to be 0.8. If the interest rates for year 2024 are within 1% of this year's rates, the probability for significant earnings growth is at 0.5. The data analyst estimates that the probability is 0.25 that the average interest rates in the year 2024 will be more than 1% higher than this year and 0.15 that they will be more than 1% lower than this year. If the company exhibits significant growth, what is the probability that the average interest rates will have been more than 1% higher than in the current year?

College Algebra (MindTap Course List)
College Algebra (MindTap Course List)
12th Edition
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:R. David Gustafson, Jeff Hughes
Chapter8: Sequences, Series, And Probability
Section8.4: Geometric Sequences And Series
Problem 6SC
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A data analyst attempting to predict a tech company's earnings in the year of 2024 believes that the tech's business is quite sensitive to the level of interest rates. He believes that, if the average interest rates in the year of 2024 are more than 1% higher than this year, the probability of significant earnings growth is 0.1. If the average interest rates in the year 2024 are more than 1% lower than this year, the probability of significant earnings growth is estimated to be 0.8. If the interest rates for year 2024 are within 1% of this year's rates, the probability for significant earnings growth is at 0.5. The data analyst estimates that the probability is 0.25 that the average interest rates in the year 2024 will be more than 1% higher than this year and 0.15 that they will be more than 1% lower than this year. If the company exhibits significant growth, what is the probability that the average interest rates will have been more than 1% higher than in the current year?
Transcribed Image Text:A data analyst attempting to predict a tech company's earnings in the year of 2024 believes that the tech's business is quite sensitive to the level of interest rates. He believes that, if the average interest rates in the year of 2024 are more than 1% higher than this year, the probability of significant earnings growth is 0.1. If the average interest rates in the year 2024 are more than 1% lower than this year, the probability of significant earnings growth is estimated to be 0.8. If the interest rates for year 2024 are within 1% of this year's rates, the probability for significant earnings growth is at 0.5. The data analyst estimates that the probability is 0.25 that the average interest rates in the year 2024 will be more than 1% higher than this year and 0.15 that they will be more than 1% lower than this year. If the company exhibits significant growth, what is the probability that the average interest rates will have been more than 1% higher than in the current year?
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