(b) Determine the probablity 81 getuing -9. The stock of WalMark Stores, Inc., t

Question

(b) Determine the probablity 81 getuing -9. The stock of WalMark Stores, Inc., trades on the New York Stock Exchange under the symbol WMS. Historically, the price of WMS goes upward with the Dow 60% of the time and goes downward with the Dow 25% of the time. There is also a 5% chance th at WMS will go up when the Dow goes down and 10% that it will go down when the Dow goes up. (a) Determine the probability that WMS will go up regardless of the Dow (b )Find the probability that WMS goes up given that the Dow is up. (e) What is the probability wMS goes down given that Dow is down? Graduating high school seniors with an ACT score of at least 26 can seek admission -10 two universities, A and B. The probability of being accepted in A is 4 and in B 25. The chance of being accepted in both universities is only 15%. Determine the probability that the student is accepted in B given that A has granted admission as well. (b) What is ty that admission will be granted in A given that the student was accepted in B? PSAl, then A and B must be independent. = echi li typ{A|B}

Explanation / Answer

Ans:

1)P(WMS up and Dow up)=0.6

P(WMS down and Dow down)=0.25

P(WMS up and Dow down)=0.05

P(WMS down and Dow up)=0.1

a)P(WMS up)=P(WMS up and Dow up)+P(WMS up and Dow down)=0.6+0.05=0.65

P(Dow up)=P(WMS up and Dow up)+P(WMS down and Dow up)=0.6+0.1=0.7

P(Dow down)=1-0.7=0.3

b)P(WMS up/Dow up)=P(WMS up and dow up)/P(dow up)=0.6/0.7=0.857

c)P(WMS down/Dow down)=P(WMS down and Dow down)/P(Dow down)=0.25/0.3=0.833

10)P(A)=0.4

P(B)=0.25

P(A and B)=0.15

a)P(B/A)=P(A and B)/P(A)=0.15/0.4=0.375

b)P(A/B)=P(A and B)/P(B)=0.15/0.25=0.6

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