An investor in wheat futures is concerned with the following events:

Based on available information, the investor believes that the probability is .01 that production of wheat will be profitable assuming a serious drought will occur in the same year and that the probability is .05 that a serious drought will occur—that is,

Based on the information provided, what is the probability that a serious drought will occur and that a profit will be made? That is, find P(A ⋂ B), the probability of the intersection of events A and B.

Transcribed Image Text:

B: {U.S. production of wheat will be profitable next year.} A: (A serious drought will occur next year.}