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The stock price of Company X has a 60% chance of increasing on Monday
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14 Dec 2021, 06:33
14 Dec 2021, 06:33
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The stock price of Company X has a 60% chance of increasing on Monday and a 30% chance of increasing on Tuesday. Assuming the two probabilities are independent, what is the probability that the stock price of Company X increases on at least one of these days?
A. 22%
B. 30%
C. 45%
D. 72%
E. 90%
A. 22%
B. 30%
C. 45%
D. 72%
E. 90%
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Re: The stock price of Company X has a 60% chance of increasing on Monday
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14 Dec 2021, 07:05
14 Dec 2021, 07:05
Carcass wrote:
The stock price of Company X has a 60% chance of increasing on Monday and a 30% chance of increasing on Tuesday. Assuming the two probabilities are independent, what is the probability that the stock price of Company X increases on at least one of these days?
A. 22%
B. 30%
C. 45%
D. 72%
E. 90%
A. 22%
B. 30%
C. 45%
D. 72%
E. 90%
We want P(increase on at least one day)
When it comes to probability questions involving "at least," it's best to try using the complement.
That is, P(Event A happening) = 1 - P(Event A not happening)
So, here we get: P(increase on at least one day) = 1 - P(not getting an increase on at least one day)
What does it mean to not get an increase on at least one day?
It means getting no increase on either day
So, we can write: P(increase on at least one day) = 1 - P(getting zero increases)
P(getting zero increases)
P(getting zero increases) = P(no increase on Monday AND no increase on Tuesday)
= P(no increase on Monday) x P(no increase on Tuesday)
= 0.4 x 0.7
= 0.28
So, we get:
P(increase on at least one day) = 1 - P(getting zero increases)
= 1 - 0.28
= 0.72
Answer: D
gmatclubot
Re: The stock price of Company X has a 60% chance of increasing on Monday [#permalink]
14 Dec 2021, 07:05
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