A finance journal published a study of whether the decision to invest in the sto
ID: 3178816 • Letter: A
Question
A finance journal published a study of whether the decision to invest in the stock market is dependent on IQ. Information on a sample of 708153,708 adults living in Finland formed the database for the study. An IQ score(from a low score of 1 to a high score of 9) was determined for each Finnish citizen as well as whether or not the citizen invested in the stock market. The following table gives the number of Finnish citizens in each IQscore/investment category. Suppose one of the 708153,708 citizens is selected at random. Complete parts a through f.
a. What is the probability that the Finnish citizen invests in the stock market?
The probability is nothing. (Round to the nearest thousandth as needed.)
b. What is the probability that the Finnish citizen has an IQ score of 6 or higher?
The probability is nothing. (Round to the nearest thousandth as needed.)
c. What is the probability that the Finnish citizen invests in the stock market and has an IQ score of 6 or higher?
The probability is nothing. (Round to the nearest thousandth as needed.)
d. What is the probability that the Finnish citizen invests in the stock market or has an IQ score of 6 or higher?
The probability is nothing. (Round to the nearest thousandth as needed.)
e. What is the probability that the Finnish citizen does not invest in the stock market?
The probability is nothing. (Round to the nearest thousandth as needed.)
f. Are the events {Invest in the stock market} and {IQ score of 1} mutually exclusive?
A. Yes, they are mutually exclusive because there are no Finnish citizens who invest in the stock market and have an IQ score of 1.
B. Yes, they are mutually exclusive because there are Finnish citizens who invest in the stock market and have an IQ score of 1.
C. No, they are not mutually exclusive because the probability that a Finnish citizen invests in the stock market and has an IQ score of 1 is very small.
D. No, they are not mutually exclusive because there are Finnish citizens who invest in the stock market and have an IQ score of 1.
IQ_Score Invest_in_Market No_Investment Totals
1 827 4,653 5,480
2 1,400 8,449 9,849
3 2,033 9,474 11,507
4 5,336 18,993 24,329
5 8,327 23,892 32,219
6 10,437 20,721 31,158
7 6,626 10,835 17,461
8 5,162 6,923 12,085
9 4,540 5,080 9,620
Totals 44,688 109,020 153,708
Explanation / Answer
IQ_Score Invest_in_Market No_Investment Totals
1 827 4,653 5,480
2 1,400 8,449 9,849
3 2,033 9,474 11,507
4 5,336 18,993 24,329
5 8,327 23,892 32,219
6 10,437 20,721 31,158
7 6,626 10,835 17,461
8 5,162 6,923 12,085
9 4,540 5,080 9,620
Totals 44,688 109,020 153,708
a. What is the probability that the Finnish citizen invests in the stock market?a. What is the probability that the Finnish citizen invests in the stock market?
Ans:P(Invest in market)=44688/153708
=0.2907
the probability that the Finnish citizen invests in the stock market is 0.2907
c. What is the probability that the Finnish citizen invests in the stock market and has an IQ score of 6 or higher?
ANs:P(Invest/IQ score of 6 or higher)=P(Invest and IQ score of 6 or higher)/P( IQ score of 6 or higher)
=(26765/153708)/(70324/153708)
=0.1741/0.4575
=0.3805
the probability that the Finnish citizen invests in the stock market and has an IQ score of 6 or higher is 0.3805
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