Question: For the tree in Fig. 4b, Section 2.2, find the probability that the price increased on the first day given that it did not exceed

For the tree in Fig. 4b, Section 2.2, find the probability that the price increased on the first day given that it did not exceed 14 on the second day. 10 2/3 1/3 14 FIGURE 4. 8 2/5 3/5 4/5 1/5 (b) 15 Probability=(2/3)(2/5)=4/15 11 Probability=(2/3)(3/5)-6/15

10 2/3 1/3 14 FIGURE 4. 8 2/5 3/5 4/5 1/5 (b) 15 Probability=(2/3)(2/5)=4/15 11 Probability=(2/3)(3/5)-6/15 10 Probability=(1/3)(4/5)=4/15 5 Probability=(1/3)(1/5)=1/15

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