Concepts n Clarity ®

Probability CFA FRM L1

Probability
a Define a random variable, an outcome, an event, mutually exclusive events,Independent
events and exhaustive events:

A random variable is an uncertain value determined by chance.

An outcome is the realization of a random variable.

An event is a set of one or more outcomes.we always define probability of event or

combination of events. Two events that cannot both occur are termed “mutually exclusive” and a
set of events that includes all possible outcomes is an “exhaustive” set of events. If events are not
dependent on each other it is called independent events.

b State the two defining properties of probability and distinguish among empirical, subjective,
a priori and posterior probabilities:

The two properties of probability are:

· The sum of the probabilities of all possible mutually exclusive events is 1.

· The probability of any event cannot be greater than 1 or less than 0.

A priori probability measures predetermined probabilities based on well-defined inputs;

empirical probability is an informed guess.

Posterior Probability is udated probability based on subsequent information closely related to

Conditional Probability

c State the probability of an event in terms of odds for and against the event:

Probabilities can be stated as odds that an event will or will not occur. If the probability of an
event is A out of B trials (A/B), the “odds against” are (B-A) to A.

d Distinguish between unconditional and conditional probabilities:

Unconditional probability (marginal probability) is the probability of an event occurring.

Conditional probability, P (A|B), is the probability of an event A occurring given that event B
has occurred.
e Explain the multiplication, addition, and total probability rules:

The multiplication rule of probability is used to determine the joint probability of two events:

The addition rule of probability is used to determine the probability the probability that at least
one of two events will occur:

The total probability rule is used to determine the unconditional probability of an event, given
conditional probability:

Where B1, B2…BN is a mutually exclusive and exhaustive set of outcomes.

f Calculate and interpret 1) the joint probability of two events, 2) the probability that at least
one of two events will occur, given the probability of each and the joint probability of the two
events, and 3) a joint probability of any number of independent events:

The joint probability of two events, P (AB), is the probability that they will both occur.
. For independent events,

The probability that at least one of two events will occur is .

For mutually exclusive events, , since P(AB)=0.

The joint probability of any number of independent events is the product of their individual
probabilities.

g Distinguish between dependent and independent events:

The probability of an independent event is unaffected by the occurrence of other events, but the
probability of a dependent event is changed by the occurrence of another event. Events A and B
are independent if and only if:

, or equivalently,
h Calculate and interpret an unconditional probability using the total probability rule:

Using the total probability rule, the unconditional probability of A is the probability weighted
sum of the conditional probabilities:

Where Bi is a set of mutually exclusive and exhaustive events.

i Explain the use of conditional expectation in investment applications:

Conditional expected values depend on the outcome of some other event.

Forecasts of expected values for a stock’s return, earnings, and dividends can be refined; using
conditional expected values, when new information arrives that affects the expected outcome.

j Explain the use of a tree diagram to represent an investment problem:

A tree diagram shows the probabilities of two events and the conditional probabilities of two
subsequent events.

k Calculate and interpret covariance and correlation:

Covariance measures the extent to which two random variables tend to be above and below
their respective means for each joint realization. It can be calculated as:

Correlation is a standardized measure of association between two random variables; it ranges in

value from -1 to +1 and is equal to .

l Calculate and interpret the expected value, variance, and standard deviation of a random
variable and of returns on a portfolio:

The expected value of a random variable, E(X), equals .

The variance of a random variable, Var(X), equals

Standard deviation:

The expected return and variance of a 2-asset portfolio are given by:

m Calculate and interpret covariance given a joint probability function:

Given the joint probabilities for Xi and Yi, i.e., P(XiYi), the covariance is calculated as:

n Calculate and interpret an updated probability using Bayes’ formula:

Bayes’ formula for updating probabilities based on the occurrence of an event O is:
o Identify the most appropriate method to solve a particular counting problem, and solve
counting problems using the factorial, combination, and permutation notations.

The number of ways to order n objects is n factorial, . There are

ways to assign k different labels to n items, where ni is the number of items with
the label i.

The number of ways to choose a subset of size R from a set of size n when order doesn’t matter is

combinations; when order matters, there are permutations.

p Calculate and interpret Probability Density Function

Probability function assign probabilities to each possible outcome. It cannot assign number below
0 or above 1 to any possible outcome and total sum must be 1. Assume u have one ladoo . U
cannot give me less than 0 or more than 1 . Total ladoo distributed to all possible person cannot
go above 1.

In a probability function, the sum of the probabilities for all of the outcomes must equal one.

Probability Part 1

General Probability, Probability function ,Axioms of Probabilit, reporting of Probabilities

Q1. A number X is chosen at random from the numbers -3, -2, -1,0,1 , 2, 3. What is the probability that
|X|<2

A. 5/7 B. 3/7 C. 3/5 D. 1/3

Q2*. The joint probability of two random variable X,Y is given by f(x,y) =k.x.y. Where X is {1,2,3}
and Y is {1,2,3}.What is the probability that x+y >5 ?

A. 1/9 B ¼ C 1/36

Q3. Two brother X and Y appeared for an exam. Let A be the event that X is selected and B is the event
that Y is selected. The probability of A is 1/7 and that of B is 2/9.. Find the probability that both of them
are selected.

A. 1/63 B. 2/35 C. 2/63 D. 9/14

Q4.Two brother X and Y appeared for an exam. Let A be the event that X is selected and B is the event
that Y is selected. The probability of A is 1/7 and that of B is 2/9.. Find the probability that at least
one of them are selected.
A 1/63 B. 21/63 C. 61/63 D. 9/14

Q5.In a game there are 70 people in which 40 are boys and 30 are girls, out of which 10 people are
selected at random. One from the total group, thus selected is selected as a leader at random. What is
the probability that the person, chosen as the leader is a boy?

A. 4/7 B. 4/9 C. 5/7 D. 2/7

Q6. The game 'Chunk-a-Luck' is played at carnivals . Its rules are as follows:

If you pick a number from 1 to 6 and the operator rolls three dice.If the number you picked comes up
on all three dice, the operator pays you Rs. 3 ; If it comes up on two dice, you are paid Rs. 2; And it
comes up on just one dice, you are paid Rs. 1.Only if the number you picked does not come up at all,
you pay the operator Rs. 1.The probability that you will win money playing in this game is:

A. 0.52 B. 0.753 C. 0.42 D. None of the above

Q7. A bag contains 12 white and 18 black balls. Two balls are drawn in succession without
replacement. What is the probability that first is white and second is black?

A. 18/145 B. 18/29 C. 36/135 D. 36/145

Q8. A speaks truth in 75% of cases and B in 80% of cases. In what percent of cases are they likely to
contradict each other in narrating the same event?
A. 60% B 40% C.100%

Q9. The odds against an event are 5:3 and the odds in favour of another independent event are 7:5.
Find the probability that at least one of the two events will occur

A. 52/96 B.69/96 C.71/96 D.13/96

Q10. You toss a coin AND roll a die. What is the probability of getting a tail and a 4 on the die?

A ½ B ¾ C 1/12

Q11. If two events are independent, the probability that they both will occur is:

A) 0.50. B) Cannot be determined from the information given. C) 0.00.

Q12. A firm holds two $50 million bonds with call dates this week.

The probability that Bond A will be called is 0.80.

The probability that Bond B will be called is 0.30.

The probability that at least one of the bonds will be called is closest to:

A) 0.86. B) 0.24. C) 0.50.

Q13. Data shows that 75 out of 100 tourists who visit New York City visit the Empire State Building. It
rains or snows in New York City one day in five. What is the joint probability that a randomly choosen
tourist visits the Empire State Building on a day when it neither rains nor snows?

A) 95%. B) 60%. C) 15%.

Q14.A bond portfolio consists of four BB-rated bonds. Each has a probability of default of 24% and
these probabilities are independent. What are the probabilities of all the bonds defaulting and the
probability of all the bonds not defaulting, respectively?

A) 0.96000; 0.04000.
B) 0.04000; 0.96000.
C) 0.00332; 0.33360.

Q15. A probability function:

A) is often referred to as the "cdf."

B) specifies the probability that the random variable takes on a specific value.
C) only applies to continuous distributions.

Q16. Which of the following could least likely be a probability function?

A)X(1,2,3,4) p(x) = (x × x) / 30.

B)X(1,2,3,4) p(x) = x / 10.
C)X(1,2,3,4) p(x) = 0.2.

Q17. If a smooth curve is to represent a probability density function, what two requirements must be
satisfied? The area under the curve must be:

A) one and the curve must not rise above the horizontal axis.
B) zero and the curve must not fall below the horizontal axis.
C) one and the curve must not fall below the horizontal axis.

Q18 . In a continuous probability density function, the probability that any single value of a random
variable occurs is equal to what?

A) One. B) Zero. C) 1/N.

Q19 – Q21 is based on the below mentioned information.

An elementary school is offering 3 language classes: one in Spanish, one in French, and one in
German. These classes are open to any of the 76 students in the school. There are 28 in the Spanish
class, 29 in the French class, and 15 in the German class. There are 11 students that in both Spanish and
French, 4 are in both Spanish and German, and 6 are in both French and German. In addition, there are
2 students taking all 3 classes.

Q19. If one student is chosen randomly, what is the probability that he or she is taking at least one
language class?

A. 53/76 B 76/76 C 72/76

Q20. If two students are chosen randomly, what is the probability that both of them are taking French?
A. 2x29/76 B. 29/76 x 29/76 C. 29/76x28/75

Q21. If the chosen student goes to French class what is the probability that he also attains German
Class.
A. 15/29 B 6/29 C 29/76

*Bayes Theorem,Conditional,Total (marginal, unconditional ) ,Posterior , priori and Subjective

Probability

Q22.Bonds rated B have a 25 percent chance of default in five years. Bonds rated CCC have a 40
percent chance of default in five years. A portfolio consists of 30 percent B and 70 percent CCC-rated
bonds. If a randomly selected bond defaults in a five-year period, what is the probability that it was a
B-rated bond?

A) 0.211.

B) 0.625.

C) 0.429.

D) 0.250.

Q23.John purchased 60 percent of the stocks in a portfolio, while Andrew purchased the other 40
percent. Half of John’s stock-picks are considered good, while a fourth of Andrew’s are considered to
be good. If a randomly chosen stock is a good one, what is the probability John selected it?

A) 0.30.

B) 0.75.

C) 0.40.

D) 0.25.
Q24. An analyst expects that 20 percent of all publicly traded companies will
experience a decline in earnings next year. The analyst has developed a ratio to
help forecast this decline. If the company is headed for a decline, there is a 90%
chance that this ratio will be negative. If the company is not headed for a decline,
there is only a 10% chance that the ratio will be negative. The analyst randomly
selects a company with a negative ratio. Based on Bayes' theorem, the updated
probability that the company will experience a decline is:

A) 18%.

B) 69%.

C) 26%.

D) 44%.

Q25. The probability of A is 0.4. The probability of AC is 0.6. The probability of

(B|A) is 0.5, and the probability of (B|AC) is 0.2. Using Bayes’ formula, what is
the probability of (A|B)?

A) 0.625.

B) 0.875.

C) 0.125.
D) 0.375.

Q26. Which of the following actions is most likely the result of applying Bayes’
theorem of conditional probability? A fundamental analyst revises a stock
recommendation when:
A) the firm issues an earnings report.
B) she revises her inflation expectations.
C) the firm experiences a major fire that destroys its production line.

Q27. What is the purpose of using Baye’s formula in the investment decision
making process?
A) Incorporate some quantitative aspects into the portfolio construction
process.
B) Incorporate new information into previous forecasts updating those
forecasts which aids in the investment decision making process.
C) Assign probabilities to various outcomes helping the investor gain insight
into the range of those possible outcomes.
Q28.Peter an employe of Gallap Survery Organisation randomly dialed one
mobile number and asserted that there is 50% chance that male will pick the
phone. The health department estimates that in USA approximation 85% of
Cigar smokers are male. During the conversation with that person , peter learned
that he is a smoker. A summery report of the above facts was prepared by
Lally
y
1. Roughly half of all Americans are males, so we estimate the probability
of selecting a male subject to be 0.5. Denoting a male by M, we can
express this probability as follows: P(M) = 0.5.This is a example of
Subjective probability .We also call this type of probabilities as A priori
probability.
2. The estimation of health department can be expressed as P(C/M) = 85%.
3. The Probability P(M/C) is a example of posterior Probability.

Which of the above statement is incorrect?

A. 1 B 2 C 3

Q29.In country X, the probability that a letter sent through the postal system
reaches its destination is 2/3 . Assume that each postal delivery is independent
of every other postal delivery, and assume that if a wife receives a letter from
her husband, she will certainly mail a response to her husband. Suppose a man
in country X mails a letter to his wife (also in country X) through the postal
system. If the man does not receive a response letter from his wife, what is the
probability that his wife received his letter?
A. 1/3 B. 3/5 C. 2/3 D 2/5

Q30.Half of the mortgages in a portfolio are considered subprime. The principal

balance of half of
the sub prime mortgages and one-quarter of the non-subprime mortgages
exceeds the value of the property used as collateral. If you randomly select a
mortgage from the portfolio for review and its principal balance exceeds the
value of the collateral, what is the probability that it is a subprime mortgage?
A. 1/4 B. 1/3 C. 1/2 D 2/3

Q 31. The joint probability of events A and B is 32 percent with the probability of
event
A being 60 percent and the probability of event B being 50 percent. Based on this
information, the conditional probability of event A given event B has occurred is
closest to:
a) 30.0%. b) 53.3%. c) 64.0%
Q32. Marie is getting married tomorrow, at an outdoor ceremony in the desert. In
recent years, it has
rained only 5 days each year. Unfortunately, the weatherman has predicted rain
for tomorrow. When it
actually rains, the weatherman correctly forecasts rain 90% of the time. When it
doesn't rain, he
incorrectly forecasts rain 10% of the time. What is the probability that it will rain
on the day of Marie's
wedding?

A.0.567 B.0.111 C. 0.332 D. 0.732

Q33. There is a 60% probability the economy will outperform, and if it does,
there is a 70% chance a
stock will go up and a 30% chance the stock will go down. There is a 40% chance
the economy will
under perform , and if it does, there is a 20% chance the stock will increase in
value and 80% chance
that it will not. It is found that stock is up, what is the chance that economy has
outperformed.

A. 42% B 84% C 60%.

Q34. Alice has two coins in her pocket, a fair coin (head on one side and tail on
the other side) and a
two-headed coin. She picks one at random from her pocket, tosses it and obtains
head. What is the
probability that she flipped the fair coin?

a) ¾ b) 1/3 c) ¼

Q35. In Orange County, 51% of the adults are males. One adult is
randomly selected for a survey involving credit card .Find the prior probability
that the selected person is a female.

A. .50 B .49 C .5x .49

Q36. There is a 50% chance that the Fed will cut interest rates tomorrow. On any
given day, there is a 67% chance the DJIA will increase. On days the Fed cuts
interest rates, the probability the DJIA will go up is 90%. What is the probability
that tomorrow the Fed will cut interest rates or the DJIA will go up?

A) 0.33. B) 0.72. C) 0.95.

 Discreet Probability Distribution
Q37. Which one of the following statement about Binomial distribution is
incorrect?

A) If probability of success in single trial is very less than 0.5, and n is small
the distribution is positively skewed .
B) If number of trial increases BD converges to Normal distribution.
C ) If number of trial increases Poisson distribution converges to BD

Q38 . Numbers of Parameter in Binomial PDF and Poisson PDF are:

A) 2 ,2 B)1, 2 C) 2, 1 D) 1 ,1

Q39 .If the chance that a vessel arrives safely at a port is 9/10 then what is the
chance that out of 5 vessels expected at least 4 will arrive safely?

A . (14 x 9^4 )/10^5 B (15 x 9^5 )/10^5 C (14 x 9^5 )/10^5

Q40. A very large company has twice as many male employees relative to female
employees. If a random sample of four employees is selected, what is the
probability that one employees selected is female?

A.40% B 33% C66%

Q41. During a typical football game, a coach can expect 3.2 injuries. Find the
probability that the team will have at most 1 injury in this game.(0.1712)

Q42. The number of traffic accidents that occur on a particular stretch of road
during a month follows a Poisson distribution with a mean of 7.6. Find the
probability that less than three accidents will occur next month on this stretch of
road. (0.018757)

Q43. Suppose the number of babies born during an 8-hour shift at a hospital's
maternity wing follows a Poisson distribution with a mean of 6 an hour. Find the
probability that five babies are born during a particular 1-hour period in this
maternity wing. (0.160623)

Q44 .A biased coin has a .6 chance of coming up heads. You flip it 50 times.
What is the variance of this distribution (answer 12)

Q45. The probability that you will win a certain game is 0.3. If you play the game
20 times, what is the probability that you will win 3 or fewer times? Ans 0.11
Answer basic probability

Q1 c
Q2 b
Marginal probability: the probability of an event occurring p(A), it may be
thought of as an unconditional probability. It is not conditioned on another event.
Joint probability: p(A and B). The probability of event A and event B
occurring.
Conditional probability: p(A|B) is the probability of event A occurring, given
that event B occurs.

Q3 Option(C) is correct

Given, A be the event that X is selected and B is the event that Y is selected.
P(A)=17 , P(B)=29.
Let C be the event that both are selected.

P(C)=P(A)×P(B) as A and B are independent events: =(1/7)×(2/9) = 2/63

Q4 b
Q5. Option(A) is correct

The total groups contains boys and girls in the ratio 4:3.If some person are
selected at random from the group, the expected value of the ratio of boys and
girls will be 4:3.If the leader is chosen at random from the selection, the
probability of him being a boy = 4/7

Q6. Option(C) is correct

If one picks up a number out of six numbers then the only case in which he/she
will lose money if none of the three dice shows the picked number on the top
surface.

Required probability of losing the game:

=5/6×5/6×5/6 =125/216, Probability winning the game =1−125/216 =91/216

=0.42

Q7.Option(D) is correct
The probability that first ball is white: = 12C1/30C1 =12/30 =2/5
Since, the ball is not replaced; hence the number of balls left in bag is 29. Hence,
the probability the second ball is black: =18C1/29C1 =18/29 .Required
probability, =(2/5)×(18/29) =36/145
Q8. B. Joint probability of both speaking truth is = 0.75x 0.80 =60%. so 60%
time both will narrate the same thing. 40% case they will contradict each other .

Q9 Option(C) is correct
Let probability of the first event taking place be A
and probability of the second event taking place be B
.
Then,
P(A) =3/(5+3)=3/8 P(B) =7/(7+5)=7/12
P( At least A or B) = 1-P( Not A) x P(Not B)= 1- (1-3/8)x(1-7/12)

Q10 Option(D) is correct

Probability of getting a tail when a single coin is tossed,=1/2
Probability of getting 4 when a die is thrown, =1/6
Required probability,=1/2×1/6 =1/12
Q11 B). P(A.B)= P(A). P(B).

Q12. We calculate the probability that at least one of the bonds will be called
using the addition rule for probabilities:
P(A or B) = P(A) + P(B) – P(A and B), where P(A and B) = P(A) × P(B)
P(A or B) = 0.80 + 0.30 – (0.8 × 0.3) = 0.86
Q13. B. A joint probability is the probability that two events occur when neither
is certain or a given. Joint probability is calculated by multiplying the probability
of each event together. (0.75) × (0.80) = 0.60 or 60%.
Q14 C
For the four independent events where the probability is the same for each, the
probability of all defaulting is (0.24)^4. The probability of all not defaulting is (1 –
0.24^4).
Q15 B. This is true by definition.
Q16 C. Probability function assign probabilities to each possible outcome. It
cannot assign number below 0 or above 1 to any possible outcome and total sum
must be 1. assume u have one ladoo . U cannot give me less than 0 or more than
1 to me. Total ladoo distributed cannot go above 1.
In a probability function, the sum of the probabilities for all of the outcomes must
equal one. Only one of the probability functions in these answers fails to sum to
one.
Q17 C. Q18 B

Q19. A. Create mutually-exclusive Groups and then count . Total number of

students who are at least taking any language class comes out to be 53. 53/76
Q20 . B
For the probability both students are taking French, we don't need any of the
above calculations. Out of 76 students, 29 are taking French. Pick the students
out one at a time, ask them whether they are taking French. The probability the
first one says yes is 29/76. Given the first said yes, the probability the second
says yes is 28/75. So the probability they both say yes is the product
29/76⋅28/75. One can simplify a bit.
Q21 B. This is related to conditional probability

Answer Prob Part 2 Bayes conditional

Q22.A)

According to Bayes' formula: P(B/default) = P(default and B)/P(default).

P(default and B )= P(default/B) x P(B) = 0.250 x 0.300 = 0.075

P(default and CCC) = P(default/CCC) x P(CCC) = 0.400 x 0.700 = 0.280

P(default) = P(default and B) + P(default and CCC) = 0.355

P(B/default) = P(default and B)/P(default) = 0.075/0.355 = 0.211

Q23.The correct answer was B)

Using the information of the stock being good, the probability is updated to a
conditional probability:

P(John | good) = P(good and John) / P(good).

P(good and John) = P(good | John) * P(John) = 0.5 * 0.6 = 0.3.

P(good and Andrew) = 0.25 * 0.40 = 0.10.

P(good) = P(good and John) + P (good and Andrew) = 0.40.

P(John | good) = P(good and John) / P(good) = 0.3 / 0.4 = 0.75.

Q24.The correct answer was B)

Given a set of prior probabilities for an event of interest, Bayes’ formula is used to
update the probability of the event, in this case that the company we have
already selected will experience a decline in earnings next year. Bayes’ formula
says to divide the Probability of New Information given Event by the
Unconditional Probability of New Information and multiply that result by the Prior
Probability of the Event. In this case, P(company having a decline in earnings
next year) = 0.20 is divided by 0.26 (which is the Unconditional Probability that a
company having an earnings decline will have a negative ratio (90 percent have
negative ratios of the 20 percent which have earnings declines) plus (10 percent
have negative ratios of the 80 percent which do not have earnings declines) or
((0.90) * (0.20)) + ((0.10) * (0.80)) = 0.26.) This result is then multiplied by the
Prior Probability of the ratio being negative, 0.90. The result is (0.20/0.26) *
(0.90) = 0.69 or 69 percent.
Q25.The correct answer was A)
Using the total probability rule, we can compute the P(B):
P(B) = [P(B|A) × P(A)] + [P(B|AC) × P(AC)]
P(B) = [0.5 × 0.4] + [0.2 × 0.6] = 0.32
Using Bayes’ formula, we can solve for P(A|B):
P(A|B) = [ P(B|A) / P(B) ] × P(A) = [0.5 / 0.32] × 0.4 = 0.625

Q26 B .A fundamental analyst bases recommendations on firm or market

fundamentals such as expected earnings. The fire would signal an unexpected
change in the firm’s fundamentals as would a revised earnings announcement.
Revising a recommendation based on the probability of a given level of inflation is
an example of applying a Bayesian framework to an expectation. That is, the
firm’s performance is based conditionally on the probability of a given level of
inflation.

Q27. B. Baye’s formula measures the probability of an event occurring given the
probability of some other event occurring. It is used in the forecasting process,
for example new information about a stock would be incorporated into a revised
forecast aiding in determining whether or not to buy or sell the stock. Using
Baye’s formula should result in more accurate forecasts.

Q28 correct answer is B.

a. Roughly half of all Americans are males, so we estimate the probability
of selecting a male subject to be 0.5. Denoting a male by M, we can
express this probability as follows: P(M) = 0.5.
b. Although some women smoke cigars, the vast majority of cigar smokers
are
males. A reasonable guess is that 85 % of cigar smoke rs re males. Based on
this additional subsequent information that the survey respondent was
smoking a cigar, we estimate the probability of this person being a male as 0.85 .
Denoting a male by M and denoting a cigar smoker by C, we can express
this result as follows: P(M | C) = 0.85.
c. In part (a) , the value of 0.5 is the initial probability, so we refer to it as the
prior probability. Because the probability of 0.85 in part (b) is a revised
probability based on the additional information that the survey subject was
smoking a cigar, this value of 0.85 is referred to a posterior probability.

Q29 D. Q30 D Q31 C

Q32. B. The sample space is defined by two mutually-exclusive events - it rains

or it does not rain. Additionally, a third event occurs when the weatherman
predicts rain. Notation for these events appears below.

Event A1. It rains on Marie's wedding.

Event A2. It does not rain on Marie's wedding.
Event B. The weatherman predicts rain.

In terms of probabilities, we know the following:

P(A1)=5365=0.0136985 [It rains 5 days out of the year.]

P(A2)=360365=0.9863014 [It does not rain 360 days out of the year.]
P(B|A1)=0.9 [When it rains, the weatherman predicts rain 90% of the time.]
P(B|A2)=0.1 [When it does not rain, the weatherman predicts rain 10% of the
time.]

We want to know P(A1|B), the probability it will rain on the day of Marie's
wedding, given a forecast for rain by the weatherman. The answer can be
determined from Bayes' theorem, as shown below.

P(A1|B)=P(A1)P(B|A1)P(A1)P(B|A1)+P(A2)P(B|A2)
P(A1|B)=(0.014×0.90.014×0.9+0.986×0.1)
P(A1|B)=0.111

Note the somewhat unintuitive result. Even when the weatherman predicts rain, it
only rains only about 11% of the time. Despite the weatherman's gloomy
prediction, there is a good chance that Marie will not get rained on at her
wedding.

Q33. B Q34 B. Q35. B Q36 B

Answer Binomial
Q37 c Q38 c Q39 A
Q40. A. this question is related to binomial selection of female is success and
number of trial is 4.