Ray Crofford Is Evaluating Investment Alternatives for the $100,000 Which

Multiple Choice

Ray Crofford is evaluating investment alternatives for the $100,000 which he inherited from his grandfather. His investment advisor has identified two alternatives and constructed the following tables which show (1) expected profits (in $10,000's) for various market conditions and their probabilities,and (2) the advisor's track record on predicting Bull and Bear markets. If the advisor predicts a Bear market the revised probability of a Bear market,P (S₂|F₂) ,is ________.

A) 0.524
B) 0.636
C) 0.784
D) 0.812
E) 0.000