For Exercise 4.54, see page 195; for 4.55, see page 197; for 4.56, see page 198; for 4.57 and 4.58, see pages 198199; for 4.59 and 4.60, see page 200; and for 4.61, see page 202.

Question 4.58

4.58 Buying from Japan.

Functional Robotics Corporation buys electrical controllers from a Japanese supplier. The company's treasurer thinks that there is probability 0.4 that the dollar will fall in value against the Japanese yen in the next month. The treasurer also believes that if the dollar falls, there is probability 0.8 that the supplier will demand renegotiation of the contract. What probability has the treasurer assigned to the event that the dollar falls and the supplier demands renegotiation?