UNIVERSITY OF SAN JOSE-RECOLETOS

SCHOOL OF BUSINESS AND MANAGEMENT

Accountancy and Finance Department

CONDITIONAL PROBABILITY AND BAYES’ THEOREM

Problem 1
A random sample of 200 adults taking MBA are classified below by sex
and their grade level attained.
Education Male % Female % TOTAL %
First year 38 19 45 22.50 83 41.50
Second year 28 14 50 25 78 39
Third year 22 11 17 8.50 39 19.50
TOTAL 88 44 112 56 200 100

If a person is picked at random from this group, find the probability that
a. The person is a male, given that the person is a second year
student

b. The person is not yet a third year student, given that the person is
a female.

Problem 2
A machine produces parts that are either good (90%), slightly defective
(2%), or obviously defective (8%). Produced parts get passed through
an automatic inspection machine, which can detect any part that is

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obviously defective and discard it. What is the probability that a part is
good given that it passed the inspection machine (i.e., it is not obviously
defective)?

Problem 3
Suppose that five good fuses and two defective ones have been mixed
up. To find the defective fuses, we test them one-by-one, at random
and without replacement. What is the probability that we are lucky and
find both of the defective fuses in the first two tests?

Problem 4
A manufacturing firm employs three analytical plans for the design and
development of a product. For cost reasons, all three are used at
varying times. In fact, plans 1, 2, and 3 are used for 30%, 20%, and 50%
of the products, respectively. The defect rate is different for the three
procedures as follows:
P ( D|P 1) =0.01, P ( D|P 2) =0.03 , P ( D|P 3) =0.02,
where P( D|P j ) is the probability of a defective product, given plan j. If a
random product was observed and found to be defective, which plan
was most likely used and thus responsible?

Problem 5
One half percent of the population has a particular disease. A test is
developed for the disease. The test gives a false positive 3% of the time
and a false negative 2% of the time.
Let D be the event that Joe has the disease. Let T be the event that
Joe’s test comes back positive
a. What is the probability that Joe (a random person) tests positive?

b. Joe just got the bad news that the test came back positive; what is
the probability that Joe has the disease.