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Calculating Probabilities

I need help with the following questions. Please show your work so I can practice with other problems.

Thank you

An oil company purchased an option on land in Oklahoma. Preliminary studies assigned the follwing prior probabilities.

P(high-quality oil) = .50
P(medium-quality oil) = .20
P(no oil) = .30

a. What is the probablility of finding oil?
b. After 200 feet of drilling on the first well, a soil test is made. The probabilities of finding the particular type of soil identified by the test are:

P(soil/high-quality oil) = .20
P(soil/medium-quality oil) = .80
P(soil/no oil) = .20

a. How should the firm interpret the soil test?
b. What are the revised probabilities, & what is the new probability of finding oil?

Thanks again.

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An oil company purchased an option on land in Oklahoma. Preliminary studies assigned the following prior probabilities.

P(high-quality oil) = .50
P(medium-quality oil) = .20
P(no oil) = .30

a. What is the probability of finding oil?

Since we only have ...

Solution Summary

The solution is in a word document format that shows step by step calculation of the probabilities

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