Question

A stockbroker knows from experience that the probability that a client owns stocks is 0.60. P(A) The probability that a client owns bonds is 0.50. P(B) The probability that the client owns bonds if he/she already owns stock is 0.55 What is the probability of a client owning stocks OR bonds

Answer 1

the probability of a client owning stocks OR bonds is 0.825

Explanation:

The computation of the probability of a client owning stocks OR bonds is given below:

= P(stocks) + P(bonds) - P(stocks and bonds)

= 0.60 + 0.50 - (0.55 × 0.50)

= 0.60 + 0.50 - 0.275

= 0.825

Hence, the probability of a client owning stocks OR bonds is 0.825