Question

A financial manager made two new investments—one in the oil industry and one in municipal bonds. After a one-year period, each of the investments will be classified as either successful or unsuccessful. Consider making the two new investments as an experiment with the following four experimental outcomes.

Experimental Outcomes		Oil Industry		Municipal Bond
E1		Successful		Successful
E2		Successful		Unsuccessful
E3		Unsuccessful		Successful
E4		Unsuccessful		Unsuccessful

a. How many sample points exist for this experiment?

b. Choose a tree diagram.
Let S = Successful, U = Unsuccessful

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c. Let O = the event that the oil industry investment is successful and M = the event that the municipal bond investment is successful.

How many sample points exist for O?

How many sample points exist for M?

d. Identify the sample points in the union of the events (O U M)

e. Identify the sample points in the intersection of the events

f. Are events O and M mutually exclusive?

Answer 1

a)

ample points exist for this experiment =2*2 =4

b)

bottom right curve is correct

c)

sample points exist for O =2

sample points exist for M =2

d)

sample points in the union of the events (O U M) =E1 ,E2,E3

f)No ;as both event can happen at same time ; threfore not mutually exclusive