An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high-quality oil)=0.50P(medium-quality oil)=0.20P(no oil)=0.30 If required, round your answers to two decimal places.(a)What is the probability of finding oil? (b)After 200 feet of drilling on the first well, a soil test is taken. The probabilities of finding the particular type of soil identified by the test are as follows. P(soil | high-quality oil)=0.20P(soil | medium-quality oil)=0.80P(soil | no oil)=0.20 How should the firm interpret the soil test? The probability of finding oil is good. Given the probability of finding good soil, the oil company is more likely to find - Select your answer -medium-qualityhigh-qualitynoItem 2 oil. What are the revised probabilities? EventsP(Ai)P(S | Ai) P(Ai ∩ S) P(Ai | S)High Quality (A1) Medium Quality (A2) No Oil (A3) P(S)= What is the new probability of finding oil?

Answered: An oil company purchased an option on…

Name: An oil company purchased an option on land in Alaska. Preliminary geol
Uploaded: 2024-03-20T07:06:41.000Z
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Description: An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high-quality oil)=0.50P(medium-quality oil)=0.20P(no oil)=0.30 If required, round your answers to two decimal places.(a)

a) The sum of t he probabilities is 1, so P(oil)+P(no oil)=1P(no oil)=1-P(oil)=1-0.3=0.70

Events

P(A_i)

P(S | A_i)

P(A_i ∩ S)

P(A_i | S)

High Quality (A₁)

Medium Quality (A₂)

No Oil (A₃)

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities.

P(high-quality oil)	=	0.50
P(medium-quality oil)	=	0.20
P(no oil)	=	0.30

If required, round your answers to two decimal places.

(a)

What is the probability of finding oil?

(b)

After 200 feet of drilling on the first well, a soil test is taken. The probabilities of finding the particular type of soil identified by the test are as follows.

P(soil \| high-quality oil)	=	0.20
P(soil \| medium-quality oil)	=	0.80
P(soil \| no oil)	=	0.20

How should the firm interpret the soil test?

The probability of finding oil is good. Given the probability of finding good soil, the oil company is more likely to find - Select your answer -medium-qualityhigh-qualitynoItem 2 oil.

What are the revised probabilities?

What is the new probability of finding oil?

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