In a Finance Class, the Final Grade Is Based on Three

question 22

Multiple Choice

In a finance class, the final grade is based on three tests. Historically, the instructor tells the class that the joint probability of scoring "A"'s on the first two tests is 0.5. A student assigns a probability of 0.9 that she will get an "A" on the first test. What is the probability that the student will score an "A" on the second test given that she scored an "A" on the first test?

• A) 0.50
• B) 0.95
• C) 0.55
• D) 0.90

---

Definitions:

Horizontal Analysis

A method used in financial analysis to compare historical financial information over a series of reporting periods.

Comparative Financial Statement

Financial statements that provide financial data for multiple periods, facilitating the analysis of trends over time.

Current Ratio

A financial ratio that expresses the relationship between current assets and current liabilities, computed by dividing current assets by current liabilities.

Marketable Securities

Financial instruments that can be easily converted into cash, often used for short-term investments by companies.