High-risk stock Moderate-risk Money-market 18% 20% 15% Short bond stock Balanced

Question

High-risk stock Moderate-risk Money-market 18% 20% 15% Short bond stock Balanced 25% 7% Intermediate bond 10% Long bond 5% A customer who owns shares in just one fund is randomly selected. What is the probability that the selected individual owns shares in the balanced fund? a)What is the probability that the selected individual owns shares in the bond fund? b)What is the probability that the selected individual does NOT owns shares in a stock fund? c)Given that the customer owns a bond fund, what is the probability that it is a short bond?

Explanation / Answer

P(balanced fund) = 0.07

a) P(bond fund) = 0.15+0.1+0.05 = 0.3

b) P(not stock fund) = 1 - P(stock fund)

= 1 - (0.18+0.25)

= 0.57

c) P(short bond | bond) = 0.15/(0.15+0.1+0.05)

= 0.3

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.