A recent survey reported in bussinessweek dealt with the sal

A recent survey reported in bussinessweek dealt with the salaries of CEOs at large corporations and whether company shareholders made money or lost money. If a company is randomly selected from the list of 33 studied, calculate the probabilities for the following: The CEO made more than $1 million. The CEO made more than $1 million or the shareholders lost money. The CEO made more than $1 million given the shareholders lost money. Select 2 CEOs and find that they both made more than $1 million.

Solution

a A CEO made more than 1 million. 6/20 = 0.3 ----------------------------------------------------------------------------------------------------------- b.the ceo made more than 1 million or the shareholder lost money. P(the CEO making more than $1M) = 6/20 P(the shareholder losing money) = 7/20 6/20 + 7/20 =13/20 However we have to subtract the companies where both things are true, because they were counted in both groups. 13/20 – 4/20 = 9/20 = 0.45 ----------------------------------------------------------------------------------------------------------- c the ceo made more than 1 million given the shareholders lost money. 4/7 = 0.5714 ----------------------------------------------------------------------------------------------------------- d. of selecting 2 ceo and finding they both made more than 1 million. P(the first CEO makes more than $1M) =6/20 P(The second CEO makes more than $1M) = 5/19 So 6/20+5/19 =30/380 = 0.0789