An investor iIs worried about the company's profit projections which investors think are too aggressive. One of the analysts will present a company-related report one week before the earnings announcement. Report shows analyst reports, while Forecast shows projected company profits Prior Probabilities P(Good Report) = 0.2 P(Medium Report) = 0.5 P(Bad Report) = 0.3 Conditional Probabilities P(Below Forecast | Good Report) = 0.1 P(Below Forecast | Medium Report) = 0.4 P(Below Forecast Bad Report) = 0.9 What is the probability that the analyst will present a good report given the below forecast company profit (below forecast)?

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An investor iIs worried about the company's profit projections which investors think are too
aggressive. One of the analysts will present a company-related report one week before the earnings
announcement. Report shows analyst reports, while Forecast shows projected company profits
Prior Probabilities
P(Good Report) = 0.2
P(Medium Report) = 0.5
P(Bad Report) = 0.3
Conditional Probabilities
P(Below Forecast | Good Report) = 0.1
P(Below Forecast | Medium Report) = 0.4
P(Below Forecast Bad Report) = 0.9
What is the probability that the analyst will present a good report given the below forecast company
profit (below forecast)?
Transcribed Image Text:An investor iIs worried about the company's profit projections which investors think are too aggressive. One of the analysts will present a company-related report one week before the earnings announcement. Report shows analyst reports, while Forecast shows projected company profits Prior Probabilities P(Good Report) = 0.2 P(Medium Report) = 0.5 P(Bad Report) = 0.3 Conditional Probabilities P(Below Forecast | Good Report) = 0.1 P(Below Forecast | Medium Report) = 0.4 P(Below Forecast Bad Report) = 0.9 What is the probability that the analyst will present a good report given the below forecast company profit (below forecast)?
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