Question 1. A procedure used for finding the equation of a straight line that provides the best approximation for the relationship between the independent and dependent variables is the

least squares method

mean squares method

correlation analysis

most squares method

Question 2 An investment advisor recommends the purchase of shares in Infogenics, Inc. He has made the following predictions:

P(Stock goes up 20% | Rise in GDP) = .6
P(Stock goes up 20% | Level GDP) = .5
P(Stock goes up 20% | Fall in GDP) = .4
An economist has predicted that the probability of a rise in the GDP is 20%, whereas the probability of a fall in the GDP is 40%.
We have been informed that the stock has gone up 20%. What is the probability of a rise or fall in the GDP?