Reference no: EM13641046

There are many consulting organizations that predict whether increases in stock prices will be unusually low, unusually high, or normal. Before decidingwhether to continue purchasing these forcasts, a stockbroker compaires past predictions with actual outcomes. the accompanying table shows the past performance of a certain consultant:

Prediction

Outcome: Unusually high, Normal, Unusually low

Unusually high: .20, .14, .04

Normal: .07, .22, .06

Unusually Low: .02, .05, .20

A.) What proportion of predictions were for unusually high increases?

B.) What proportion of outcomes were for unusually high increases?

C.) When the consultant predicted unusually high increases in stock prices, what was the probability that he was correct?

D.) Given that there were unusually high increases, what was the probability that the consultant had predicted unusually low increases?