Homework SourseA financial consultant has classified his clients according
A financial consultant has classified his clients according to their gender and the composition of their investment portfolio (primarily bonds, primarily stocks, or a balanced mix of bonds and stocks). The proportions of clients falling into the various categories are shown in the following table:
What is the probability of being above 40 or having stocks?
| age | bonds | stocks | balanced |
| above 40 | 0.1 | 0.15 | 0.1 |
| below 40 | 0.15 | 0.25 | 0.25 |
Solution
Following is the completed table:
From table we have
P(above 40)=0.35
P(having stocks)=0.4
P(above 40 and having stocks)=0.15
So the probability of being above 40 or having stocks is
P(above 40 or having stocks)=P(above 40)+P(having stocks)-P(above 40 and having stocks) =0.35+0.4-0.15
=0.6
Hence, the probability of being above 40 or having stocks is 0.6.
| age | bonds | stocks | balanced | Total |
| above 40 | 0.1 | 0.15 | 0.1 | 0.35 |
| below 40 | 0.15 | 0.25 | 0.25 | 0.65 |
| Total | 0.25 | 0.4 | 0.35 | 1 |
