Topic 15 - Probabilities Test ID: 8450917

Question #1 of 21 Question ID: 438710

A company says that whether its earnings increase depends on whether it increased its dividends. From this we know:

A) P(dividend increase or earnings increase) = P(both dividend and earnings increase).

B) P(both dividend increase and earnings increase) = P(dividend increase).
C) P(dividend increase | earnings increase) is not equal to P(earnings increase).
D) P(earnings increase | dividend increase) is not equal to P(earnings increase).

Question #2 of 21 Question ID: 438722

A conditional expectation involves:

A) determining the expected joint probability.

B) estimating the skewness.
C) calculating the conditional variance.
D) refining a forecast because of the occurrence of some other event.

Question #3 of 21 Question ID: 438709

An investor is choosing one of twenty securities. Ten of the securities are stocks and ten are bonds. Four of the ten stocks were
issued by utilities, the other six were issued by industrial firms. Two of the ten bonds were issued by utilities, the other eight were
issued by industrial firms. If the investor chooses a security at random, the probability that it is a bond or a security issued by an
industrial firm is:

A) 0.80.
B) 0.50.

C) 0.60.
D) 0.70.

Question #4 of 21 Question ID: 438725

A joint probability of A and B must always be:

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 A) less than or equal to the conditional probability of A given B.
B) greater than or equal to than the probability of A or B.
C) greater than or equal to the conditional probability of A given B.
D) less than the probability of A and the probability of B.

Question #5 of 21 Question ID: 438723

Dependent random variables are defined as variables where their joint probability is:

A) not equal to the product of their individual probabilities.

B) equal to zero.
C) equal to the product of their individual probabilities.
D) greater than the product of their individual probabilities.

Question #6 of 21 Question ID: 438711

Thomas Baynes has applied to both Harvard and Yale. Baynes has determined that the probability of getting into Harvard is 25%
and the probability of getting into Yale (his father's alma mater) is 42%. Baynes has also determined that the probability of being
accepted at both schools is 2.8%. What is the probability of Baynes being accepted at either Harvard or Yale?

A) 7.7%.
B) 67.0%.
C) 10.5%.
D) 64.2%.

Question #7 of 21 Question ID: 438726

The probability of a new Wal-Mart being built in town is 64%. If Wal-Mart comes to town, the probability of a new Wendy's
restaurant being built is 90%. What is the probability of a new Wal-Mart and a new Wendy's restaurant being built?

A) 0.306.
B) 0.675.
C) 0.240.
D) 0.576.

Question #8 of 21 Question ID: 438721

A dealer in a casino has rolled a five on a single die three times in a row. What is the probability of her rolling another five on the
next roll, assuming it is a fair die?

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 A) 0.200.
B) 0.500.
C) 0.167.
D) 0.001.

Question #9 of 21 Question ID: 438720

X and Y are discrete random variables. The probability that X = 3 is 0.20 and the probability that Y = 4 is 0.30. The probability of
observing that X = 3 and Y = 4 concurrently is closest to:

A) 0.06.
B) 0.
C) 0.50.
D) Cannot answer with the information provided.

Question #10 of 21 Question ID: 438707

Which of the following statements about probability is most accurate?

A) An outcome is the calculated probability of an event.

B) Out of a sample of 100 widgets 10 were found to be defective, 20 were perfect, and 70 were OK.
The probability of picking a perfect widget at random is 29%.
C) An event is a set of one or more possible values of a random variable.
D) A conditional probability is the probability that two or more events will happen concurrently.

Question #11 of 21 Question ID: 438717

The probabilities that three students will earn an A on an exam are 0.20, 0.25, and 0.30, respectively. If each student's
performance is independent of that of the other two students, the probability that all three students will earn an A is closest to:

A) 0.0150.
B) 0.0075.
C) 0.0010.
D) 0.7500.

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Question #12 of 21 Question ID: 438718

An investor has an A-rated bond, a BB-rated bond, and a CCC-rated bond where the probabilities of default over the next three
years are 4 percent, 12 percent, and 30 percent, respectively. What is the probability that all of these bonds will default in the
next three years if the individual default probabilities are independent?

A) 1.44%.
B) 0.14%.
C) 46.00%.
D) 23.00%.

Question #13 of 21 Question ID: 438713

If the outcome of event A is not affected by event B, then events A and B are said to be:

A) mutually exclusive.

B) statistically independent.

C) conditionally dependent.

D) collectively exhaustive.

Question #14 of 21 Question ID: 438724

If the probability of both a new Wal-Mart and a new Wendy's being built next month is 68% and the probability of a new Wal-Mart
being built is 85%, what is the probability of a new Wendy's being built if a new Wal-Mart is built?

A) 0.85.
B) 0.80.
C) 0.70.
D) 0.60.

Question #15 of 21 Question ID: 438708

If X and Y are independent events, which of the following is most accurate?

A) P(X or Y) = (P(X)) × (P(Y)).

B) P(X | Y) = P(X).
C) X and Y cannot occur together.
D) P(X or Y) = P(X) + P(Y).

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Question #16 of 21 Question ID: 438706

Let A and B be two mutually exclusive events with P(A) = 0.40 and P(B) = 0.20. Therefore:

A) P(A and B) = 0.08.

B) P(A or B) = 0.52.
C) P(A and B) = 0.
D) P(B|A) = 0.20.

Question #17 of 21 Question ID: 438712

The following table summarizes the availability of trucks with air bags and bucket seats at a dealership.

Bucket No Bucket
Total
seats Seats
Air Bags 75 50 125
No Air Bags 35 60 95
Total 110 110 220

What is the probability of randomly selecting a truck with air bags and bucket seats?

A) 0.34.
B) 0.57.
C) 0.28.
D) 0.16.

Question #18 of 21 Question ID: 438714

The following table summarizes the availability of trucks with air bags and bucket seats at a dealership.
Bucket Seats No Bucket Seats Total
Air Bags 75 50 125
No Air Bags 35 60 95
Total 110 110 220

What is the probability of selecting a truck at random that has either air bags or bucket seats?

A) 73%.
B) 50%.
C) 34%.
D) 107%.

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Question #19 of 21 Question ID: 438719

If two fair coins are flipped and two fair six-sided dice are rolled, all at the same time, what is the probability of ending up with two
heads (on the coins) and two sixes (on the dice)?

A) 0.8333.
B) 0.4167.
C) 0.0039.
D) 0.0069.

Question #20 of 21 Question ID: 438715

Given the following table about employees of a company based on whether they are smokers or nonsmokers and whether or not
they suffer from any allergies, what is the probability of both suffering from allergies and not suffering from allergies?

Suffer from Allergies Don't Suffer from Allergies Total

Smoker 35 25 60
Nonsmoker 55 185 240
Total 90 210 300

A) 0.50.
B) 0.24.
C) 1.00.

D) 0.00.

Question #21 of 21 Question ID: 438716

If a fair coin is tossed twice, what is the probability of obtaining heads both times?

A) 1.
B) 3/4.
C) 1/2.
D) 1/4.

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