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Ad analyst develops the following probability distribution for the states of the economy and market returns.

Which of the following statements about this probability distribution is least accurate?

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Question:

Which of the following statements about this probability distribution is least accurate?

A
The joint probability of having a good economy and a bear market is 0.20.

explanation

P(good economy and bear market) = 0.60 x 0.20 = 0.12. The other statements are true. The P(normal market) = (0.60 x 0.30) + (0.40 x 0.30) = 0.30. Given that the economy is poor, the probability of a normal or bull market = 0.30 + 0.20 = 0.50.

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