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Period of strong growth with probability

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Reference no: EM132110095

Suppose an economist knows the following statistics about a particular economy:

  • The economy will be in a period of strong growth with probability 0.6
  • The economy will be in a period of weak growth with probability 0.4
  • In periods of strong growth, the probability that the economy's currency appreciates in value is 0.7
  • In periods of weak growth, the probability that the economy's currency appreciates in value is 0.3
  • The probability of a currency appreciation in any given period is 0.54.

What is the probability of strong growth and a currency appreciation in any given period?

Reference no: EM132110095

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