In a survey conducted by a business-advisory firm of 4980 adults 18 years old an

Question

In a survey conducted by a business-advisory firm of 4980 adults 18 years old and older in June 2009, during the "Great Recession," the following question was asked: How long do you think it will take to recover your personal net worth? The results of the survey follow. (Round your answers to three decimal places.)

(a) Determine the empirical probability distribution associated with these data.

(b) If a person who participated in the survey is selected at random, what is the probability that he or she expects that it will take 5 or more years to recover his or her personal net worth?

Answer (years)      12      34      510      10 Respondents 1004 1307 2116 553

Explanation / Answer

(a)

The empirical probability of each age group will be equal to its relative frequency. Following table shows the empirical probability:

(b)

The probability that he or she expects that it will take 5 or more years to recover his or her personal net worth is

P = 0.425 +0.111 = 0.536

Years Frequency, f Probability ,P=f/4980 1-2 1004 0.202 3-4 1307 0.262 5-10 2116 0.425 >=10 553 0.111 Total 4980 1

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