The probabilities that stock A will rise in price is 0.7 and that stock B will rise in price is 0.6. Further, if stock B rises in price, the probability that stock A will also rise in price is 0.8. What is the probability that both of the stocks will rise in price?
Added by Remedios C.
Step 1
Given that the probability of stock A rising when stock B rises is 0.8, and the probability of stock B rising is 0.6, we can use the formula for conditional probability: \[ P(A|B) = \frac{P(A \cap B)}{P(B)} \] Substitute the values: \[ 0.8 = \frac{P(A \cap Show more…
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