Question

ly ide i g Lesd ow W Eample 3 Use the following probabilities in the table below to answer 5 (five) questions Mutual fund does NOT Mutual fund out out performs the market performs the market Manager gradsated from top MBA school 0.20 0.25 Manager did NOT graduate from top MBA school 0.15 0.40 A What is the proportion of manager graduated from top MBA school? 6What is the probability of mutual Fund Out perfoms the Market? C P (Manager graduated from top MBA school OR Mutual Fund Outperforms the Market? D P (Manager did NOT graduate from top MBA school AND Mutual Fund does NOT Out performs E P(Mutual Fund Out performs the Market Manager did NOT graduate from top MBA school Market)? hor Mar Ses e We w The values of investment properties in Brisbane are normally distributed with mean $360 000 and standard deviation $60 000 An Investment property is randomly selected aWhat is the probability that the property is worth less than $3000007 What's is the probability that the property is worth more than half a million dollars b What proportion of investment propertics are within $40,000 of the expected value? E

Answer 1

A. Froportion of ma nagar graduatn from top MBA school 0.20 t 0 25 0, 45 B. The probability of mutual Fund out perfoorms the Market 0. 35 C. P (Manager graduated foom top MBA sehool O70 Mutual Fund Out perfonms the Market) = P(A UB) = PA) P(B)- P (AnB) O. 45 + 0.35 C20 O. 60 D. P (Manager did NOT graduate foom top MBA does not out performs the Marret) chool AND Mutual Fund O. 40

E. PMutual Fund Out perfonms the Market Manager did NOT from top MBA sehool) graduate P (ClD) = P(anD) D 15 O-15 O-15+ 0.4 O.55 3 O-273 ) Let X be the values of investment prodrties N(360,000 60,000 a. p (X 3oooo O) 360000 360000 3000 00 X oO000 60000 P Z<1) (-) 0.15 86 55 3

b. x500000) 500000- 360000 60 000 AS P(Z 2.33 1 - (2.33) 009 824073

P (360000 - 400 0 0 X < 360000 40000 P (320000 400 0oo 320000-360000 L Z ? 400000-360600 60000 60000 P(-0. 667 Z 0.667) (0- 66) (-0.66) - = 2 (0.66)- O-495 2279