After extensive research, an analyst asserts that there is an 80% chance that ABC Corporation will beat its EPS forecast. Analogously, the odds for the company beating its EPS forecast are ________.
A) one in four
B) 1 in 1.25
C) four to one
D) 1.25 to 1

Question

Quizplus · Accepted Answer

The odds of an event happening are calculated as the probability of the event happening divided by the probability of the event not happening. With an 80% chance (or 0.8 probability) of beating its EPS forecast, the probability of not beating the forecast is 20% (or 0.2). Thus, the odds are 0.8 / 0.2 = 4 to 1.

After Extensive Research, an Analyst Asserts That There Is an 80