7) (Hardest) Investment advisors might subscribe to the Wall Street Journal or I

Question

7) (Hardest) Investment advisors might subscribe to the Wall Street Journal or Investor's Business Daily. Suppose 80% subscribe to the WSJ. Of those that subscribe to the WSJ, 75% also subscribe to IBD. Also, 20% of those that subscribe to exactly one of the papers subscribe to IBD. a) Construct a probability table b) What is the probability an investment advisor subscribe to neither paper? c) What proportion of investment advisors subscribe to IBD? d) Given an investment advisor receives IBD, what is the probability they also receive the WSJ?

Explanation / Answer

(a) Probability table

Ans:  

(b) What is the probability an investment advisor subscribe to neigther paper?

Ans:0.15

(c) What proportion of investment advisor subscribe to IBD?
Ans:0.65

(d) give an investment advisor receives IBD wha is the probability they also receive the WSJ?

Ans:0.60/0.65

         =0.9231

WSJ WSJc Total IBD 0.6 0.05 0.65 IBDc 0.2 0.15 0.35 Total 0.8 0.2 1

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