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30 points to whoever solves-example-1
User Muhfred
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1 Answer

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ANSWERS:

A. 0.28 ( 28.41% )
B. 89.29%

EXPLANATIONS:

(a) The probability of a randomly chosen U.S. adult investing in both stocks and fixed income instruments is given as 0.25. The probability of a U.S. adult investing in fixed income instruments is 0.88. Using the formula for conditional probability, we have:

P(invests in stocks | invests in fixed income instruments) = P(invests in both stocks and fixed income instruments) / P(invests in fixed income instruments)

= 0.25 / 0.88

= 0.2841 (rounded to the nearest hundredth)

Therefore, the probability that a randomly chosen U.S. adult invests in stocks, given that he or she invests in fixed income instruments is 0.28 (rounded to the nearest hundredth).

To convert A to a percentage, simply multiply it by 100:

A = 0.2841

A as a percentage = 0.2841 x 100% = 28.41% (rounded to two decimal places)

(b) The probability of a randomly chosen U.S. adult investing in both stocks and fixed income instruments is 0.25, and the probability of a U.S. adult investing in stocks is 0.28. Using the formula for joint probability, we have:

P(invests in both stocks and fixed income instruments) = P(invests in stocks) × P(invests in fixed income instruments)

= 0.28 × 0.88

= 0.2464

The probability that a randomly chosen stock investor also invests in fixed income instruments is 0.25 / 0.28 = 0.8929 (rounded to the nearest hundredth), which is equivalent to 89.29%.

User Jassin
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