An investment advisor recommends the purchase of shares in I…
An investment advisor recommends the purchase of shares in Infogenics, Inc. He has made the following predictions:P(stock goes up 20% | rise in GDP) = 0.6P(stock goes up 20% | level GDP) = 0.5P(stock goes up 20% | fall in GDP) = 0.4An economist has predicted that the probability of a rise in the GDP is 30%, whereas the probability of a fall in the GDP is 40%.a. Draw a tree diagram to represent this multiple-step experiment.b. What is the probability that the stock will go up 20%?c. We have been informed that the stock has gone up 20%. What is the probability of a rise or fall in the GDP?