Question

In a certain town 60% of the households own mutual funds, 40% own individual stocks, and 20% own both mutual funds and individual stocks. The proportion of households that own mutual funds but not individual stocks is:A) 20%.

B) 30%.
C) 40%.
D) 50%

Answer 1

C. 40%

Explanation:

Using set notations,

Check the attachment for the diagram.

Let the total fund shared by the town be 100% which will be our universal set.

Let X be proportion of households that own mutual funds but not individual

From the venn diagram,

The total number of people that owned mutual fund M = (proportion of households that owned both mutual fund and individual stock) + (proportion of households that own mutual funds but not individual stocks)

If X is the proportion of households that own mutual funds but not individual stocks

The total number of people that owned mutual fund = (proportion of households that owned both mutual fund and individual stock) + X

X = (the total number of people that owned mutual fund)- (proportion of households that owned both mutual fund and individual stock)

X = 60% - 20%

X = 40%