An Analyst Expects That 20% of All Publicly Traded Companies

Multiple Choice

An analyst expects that 20% of all publicly traded companies will experience a decline in earnings next year.The analyst has developed a ratio to help forecast this decline.If the company is headed for a decline,there is a 90% chance that this ratio will be negative.If the company is not headed for a decline,there is only a 10% chance that the ratio will be negative.The analyst randomly selects a company with a negative ratio.Based on Bayes's theorem,the posterior probability that the company will experience a decline is

A) 18%.
B) 26%.
C) 44%.
D) 69%.