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Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?

Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?
Transcribed Image Text:Each year, a company either makes a profit or takes a loss. If the company made a profit the year before, they will make a profit with probability 0.7. If they took a loss the year before, they will make a profit with probability 0.3. What is the long-run probability the company will make a profit?
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