solutionstopracticeproblemsforpartii.docVIP

Solutions to Practice Problems for Part II 1. A fund manager is considering investment in the stock of a health care provider. The managers assessment of probabilities for rates of return on this stock over the next year are summarized in the accompanying table. Let A be the event Rate of return will be more than 10% and B the event Rate of return will be negative. RATE OF RETURN Less than - 10% - 10% to 0% 0% to 10% 10% to 20% More than 20% PROBABILITY .04 .14 .28 .33 .21 Find the probability of event A. Find the probability of event B. Describe the event that is the complement of A. is the event in which Rate of return will be no more than 10%. Find the probability of the complement of A. Describe the event that is the intersection of A and B. is the event in which the rate of return is both more than 10% and less than zero. Find the probability of the intersection of A and B. It is impossible for the rate of return both to be more than 10% and less than zero, so: Describe the event that is the union of A and B. is the event in which the rate of return is either more than 10% or less than zero. Find the probability of the union of A and B. Are A and B mutually exclusive? Yes; they cant both occur at the same time. Are A and B collectively exhaustive? No. If, for example, the rate of return is 5%, then neither A nor B has occurred. 2. A manager has available a pool of eight employees who could be assigned to a project-monitoring task. Four of the employees are women and four are men. Two of the men are brothers. The manager is to make the assignment at random, so that each of the eight employees is equally likely to be chosen. Let A be the event chosen employee is a man and B the event chosen employee is one of the brothers. Find the probability of A. Find the probability of B. Find the probability of the intersection of A and B. Find the probability of the union of A and B. 3. A