Question

Instructions: Search the news, or online articles and sites to find the term “probability” (likelihood, odds, and expected outcome are also acceptable terms rather than “probability”). Locate two examples, one where you believe it is used correctly and one that you think seems fishy. Post your sources as a reference. No need to explain the articles, or how the term is used because that will be done in our response later in this module.

Answer 1

First article: https://news.yahoo.com/forex-dollar-set-biggest-rise-105350267.html

Usage: " Markets are pricing in about a 33% probability of a quarter point rate cut next week and as many as 73 basis points in cumulative rate cuts through the end of the year. "

Here the usage means Markets think there is a 33% chance of 0.25 points rate cut in the upcoming week and 73 basis points in other rates throughout the year. Markets will be factoring these chances in their pricing

Second article: https://www.campaignlive.co.uk/article/facts-v-truth/1586774

Usage: "The professor explained how statistics worked to the jury.

He said you can narrow down the possibility by multiplying the probability of the events together."

This is not necessarily true. For example if the two events are not independent, then probability of the two can't be the same as multiplying individual probability values

$\blacksquare$

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