A mutual fund company offers its customers a variety of funds: a money-market fu

Question

A mutual fund company offers its customers a variety of funds: a money-market fund, three different bond funds (short, intermediate, and long-term), two stock funds (moderate and high-risk), and a balanced fund. Among customers who own shares in just one fund, the percentages of customers in the different funds are as follows. Money-market 25% Short bond 13% Intermediate bond 7% Long bond 5% High-risk stock 19% Moderate-risk stock 25% Balanced 6% A customer who owns shares in just one fund is randomly selected. (a) What is the probability that the selected individual owns shares in the balanced fund? _______ (b) What is the probability that the individual owns shares in a bond fund? _______ (c) What is the probability that the selected individual does not own shares in a stock fund? _______

Explanation / Answer

a) P( Balanced Fund) = 0.06

B) P( Bond Fund) = 0.13+0.07+0.05 = 0.25

C) P ( Not in stock ) = 1-0.25-0.19 = 0.56

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