As a stock market analyst for a major brokerage house
As a stock market analyst for a major brokerage house, you are responsible for knowing everything about the automotive companies. In particular, Ford is scheduled to release its net earnings for the past quarter soon, and you do not know what that number will be.
a. Describe the random experiment identified here.
b. What is the sample space?
c. What will the outcome tell you?
d. Based on everything you know currently, you have computed a dollar figure for net earnings that you feel is likely to be close to the actual figure to be announced. Identify precisely the event “the announced earnings are higher than expected” by listing the qualifying outcomes from the sample space.
e. You have an idea of the probability that the announced earnings will be higher than expected. What kind of probability is this if it is based not just on past experience but also on your opinion as to the current situation?
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