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3) Define coefficient of variation and use it to find out which of the following investment is more risky .
INVESTMENT A : A.M .of returns= 12% , S.D of returns : 2%
INVESTMENT B : A.M .of returns= 11% , S.D of returns : 1%
Probability and Probability Distributions: Basic Concepts of Probability: Addition theorem,Multiplication theorem,
1)Describe three approaches to probability : Classical Approach, Relative Frequency Approach & Subjective Probability Approach
2)State addition theorem of probability and indicate when it is used.
3)State multiplication theorem of probability and indicate when it is used.
5) On a recent holiday evening, a sample of 500 drivers was stopped by the police. Three hundred were under 30 years of age. A total of
250 were under the influence of alcohol. Of the drivers under 30 years of age, 200 were under the influence of alcohol.
Answers:
a. P(Y) = 0.6 P(A) = 0.5
b. 0.2
c. 0.25
d. 0.667
e. A Ac
Y 0.4 0.2
Yc 0.1 0.3
f. No, P(A Y) 0
g. No, P(AY) P(A)
6) A bank has the following data on the gender and marital status of 200 customers .
Male Female
Single 20 30
Married 100 50
Answer: 56
8) From a group of seven finalists to a contest, three individuals are to be selected for the first and second and third places. Determine the
number of possible selections.
Answer: 210
9) Ten individuals are candidates for positions of president, vice president of an organization. How many possibilities of selections
exist?
Answer: 90
10) Assume you have applied for two scholarships, a Merit scholarship (M) and an Athletic scholarship (A) The probability that you receive
an Athletic scholarship is 0.18. The probability of receiving both scholarships is 0.11. The probability of getting at least one of the
scholarships is 0.3.
Answers:
a. 0.23
b. No, because P(A M) 0
c. No, because P(A M) P(A) P(B)
d. 0.4783
e. 0.6111