Question

Among a group of 2500 people, 35 percent invest in municipal bonds, 18 percent invest in oil stocks, and 7 percent invest in both municipal bonds and oil stocks. if 1 person is to be randomly selected from 2500 people, what is the probability that the person selected will be one who invests in municipal bonds but not in oil stocks.

a.7/25

b.3/25

c.9/25

d.5/25

Answer 1

Answer : 7/25

The probability of investing in mutual stocks only is 0.28; the corresponding fraction is 7/25.

Let probability of investing in mutual stocks be P(M)

Let probability of investing in oil stocks be P(O)

Let Probability of investing in mutual stocks and oil be P(M and O).

Let Probability of investing in mutual stocks only be P(M only)

So, the probability of investing only in Mutual stock is given by:

$P(M only) = P(M) - P(M and O)$

Substituting the values from the question we have,

$P(M only) = 0.35 - 0.07 =0.28$