BC_MBA_student

SFA Wrote:
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> That is, if you randomly guess, your expected
> return is 33%. However, if you instead attempt to
> answer multiple choice questions based on a
> combination of the provided information and your
> knowledge, this 33% is no longer relevant and your
> 'starting point' is back at zero.


I disagree.

Say that I'm an economist, and each day I need to use available information and my knowledge to predict whether the USD will A) Appreciate, or B) Depreciate versus the Euro.

I'd expect an unknowledgable person to be able to predict this correctly on 50% of days.

By your argument, the professional economist should be measured against a benchmark of 0% correct -- so if he predicts correctly on 25% of days he is a good economist.

I don't think that's right. You need to compare the economist's performance against what one could achieve (50%) by knowing nothing and guessing.

Similarly, on a multiple choice test with three choices, a 33% score should be considered the baseline; that's what performance must be compared against.