File: ch04, Chapter 4 Test Bank

True/false

1. Inferring the value of a population parameter from the statistic on a random sample drawn
from the population is an inferential process under uncertainty.

Ans: True
Response: See section 4.1 Introduction to Probability
Difficulty: Easy
Learning Objective: 4.1: Describe what probability is and when one would use it.

2. The method of assigning probabilities to uncertain outcomes based on laws and rules is called
the classical method.

Ans: True
Response: See section 4.2 Methods of Assigning Probabilities
Difficulty: Easy
Learning Objective: 4.2: Differentiate among three methods of assigning probabilities: the
classical method, relative frequency of occurrence, and subjective probability.

3. Assigning probabilities by dividing the number of ways that an event can occur by the total
number of possible outcomes in an experiment is called the relative frequency of occurrence
method.

Ans: False
Response: See section 4.2 Methods of Assigning Probabilities
Difficulty: Easy
Learning Objective: 4.2: Differentiate among three methods of assigning probabilities: the
classical method, relative frequency of occurrence, and subjective probability.

4. Assigning probabilities to uncertain events based on one’s beliefs or intuitions is called

classical method.

Ans: False
Response: See section 4.2 Methods of Assigning Probabilities
Difficulty: Easy

1
Learning Objective: 4.2: Differentiate among three methods of assigning probabilities: the
classical method, relative frequency of occurrence, and subjective probability.

5. An experiment is a process that produces outcomes.

Ans: True
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

6. An event that cannot be broken down into other events is called a certainty outcome.

Ans: False
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

7. The list of all elementary events for an experiment is called the sample space.

Ans: True
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

8. If the occurrence of one event does not affect the occurrence of another event, then the two
events are mutually exclusive.

Ans: False
Response: See section 4.3 Structure of Probability
Difficulty: Hard
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

2
9. If the occurrence of one event precludes the occurrence of another event, then the two events
are independent.

Ans: False
Response: See section 4.3 Structure of Probability
Difficulty: Hard
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

10. If two events are mutually exclusive, then the two events are also independent.

Ans: False
Response: See section 4.3 Structure of Probability
Difficulty: Hard
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

11. If two events are mutually exclusive, then their joint probability is always zero.

Ans: True
Response: See section 4.5 Addition Laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

12. Given two events, A and B, if the probability of either A or B occurring is 0.8, then the
probability of neither A nor B occurring is -0.8.

Ans: False
Response: See section 4.5 Addition Laws
Difficulty: Easy
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

3
13. Given two events, A and B, if the probability of A is 0.6, the probability of B is 0.4, and the
joint probability of A and B is 0.24, then the two events are independent.

Ans: True
Response: See section 4.6 Multiplication Laws
Difficulty: Medium
Learning Objective: 4.6 Calculate joint probabilities of both independent and dependent events
using the general and special laws of multiplication.

14. Given that two events, A and B, are independent, if the marginal probability of A is 0.6, the
conditional probability of A given B will be 0.4.

Ans: False
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

15. Given two events A and B each with a non-zero probability, if the conditional probability of
A given B is zero, it implies that the events A and B are independent.

Ans: False
Response: See section 4.7 Conditional Probability
Difficulty: Hard
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

16. Given two events A and B each with a non-zero probability, if the conditional probability of
A given B is zero, it implies that the events A and B are mutually exclusive.

Ans: True
Response: See section 4.7 Conditional Probability
Difficulty: Hard
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

17. Bayes’ rule is a rule to assign probabilities under the classical method.

Ans: False
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule

4
Difficulty: Easy
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

18. Bayes’ rule is an extension of the law of conditional probabilities to allow revision of original
probabilities with new information.

Ans: True
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Easy
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

19. The probability of A È B where A is receiving a state grant and B is receiving a federal grant
is the probability of receiving no more than one of the two grants.

Ans: False
Response: See section 4.4 Marginal, Union, Joint, and Conditional Probabilities

Difficulty: Easy
Learning Objective: 4.4: Compare marginal, union, joint, and conditional probabilities by
defining each one.

20. Probability is used to develop knowledge of the fundamental mathematical tools for
quantitatively assessing risk.

Ans: True
Response: See section 4.1 Introduction to Probability
Difficulty: Easy
Learning Objective: 4.1: Describe what probability is and when one would use it.

Multiple Choice

21. Belinda Bose is reviewing a newly proposed advertising campaign. Based on her 15 years
experience, she believes the campaign has a 75% chance of significantly increasing brand name
recognition of the product. This is an example of assigning probabilities using the
________________ method.
a) subjective probability
b) relative frequency
c) classical probability

5
d) a priori probability
e) a posterior probability

Ans: a
Response: See section 4.2 Methods of Assigning Probabilities
Difficulty: Medium
Learning Objective: 4.2: Differentiate among three methods of assigning probabilities: the
classical method, relative frequency of occurrence, and subjective probability.

22. Which of the following is not a legitimate probability value?

a) 0.67
b) 15/16
c) 0.23
d) 4/3
e) 0.98

Ans: d
Response: See section 4.2 Methods of Assigning Probabilities
Difficulty: Easy
Learning Objective: 4.2: Differentiate among three methods of assigning probabilities: the
classical method, relative frequency of occurrence, and subjective probability.

23. Which of the following is not a legitimate probability value?

a) 0.67
b) 15/16
c) 0.23
d) 2/3
e) -0.28

Ans: e
Response: See section 4.2 Methods of Assigning Probabilities
Difficulty: Easy
Learning Objective: 4.2: Differentiate among three methods of assigning probabilities: the
classical method, relative frequency of occurrence, and subjective probability.

24. The list of all elementary events for an experiment is called _______.
a) the sample space
b) the exhaustive list
c) the population space
d) the event union
e) a frame

6
Ans: a
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

25. In a set of 15 aluminum castings, two castings are defective (D), and the remaining thirteen
are good (G). A quality control inspector randomly selects three of the fifteen castings without
replacement, and classifies each as defective (D) or good (G). The sample space for this
experiment contains ____________ elementary events.
a) 3,375
b) 2,730
c) 455
d) 15
e) 3

Ans: c
Response: See section 4.3 Structure of Probability
Difficulty: Medium
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

26. In a set of 10 aluminum castings, two castings are defective (D), and the remaining eight are
good (G). A quality control inspector randomly selects three of the ten castings with
replacement, and classifies each as defective (D) or good (G). The sample space for this
experiment contains __________ elementary events.
a) 1,000
b) 720
c) 100
d) 10
e) 3

Ans: a
Response: See section 4.3 Structure of Probability
Difficulty: Medium
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

7
27. If X and Y are mutually exclusive events, then if X occurs _______.
a) Y must also occur
b) Y cannot occur
c) X and Y are independent
d) X and Y are complements
e) A and Y are collectively exhaustive

Ans: b
Response: See section 4.3 Structure of Probability
Difficulty: Easy

Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,

sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

28. Consider the following sample space, S, and several events defined on it. S = {Albert, Betty,
Abel, Jack, Patty, Meagan}, and the events are: F = {Betty, Patty, Meagan}, H = {Abel,
Meagan}, and P = {Betty, Abel}. F Ç H is ___________.
a) {Meagan}
b) {Betty, Patty, Abel, Meagan}
c) empty, since F and H are complements
d) empty, since F and H are independent
e) empty, since F and H are mutually exclusive

Ans: a
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

29. Consider the following sample space, S, and several events defined on it. S = {Albert, Betty,
Abel, Jack, Patty, Meagan}, and the events are: F = {Betty, Patty, Meagan}, H = {Abel,
Meagan}, and P = {Betty, Abel}. F È H is ___________.
a) {Meagan}
b) {Betty, Abel, Patty, Meagan}
c) empty, since F and H are complements
d) empty, since F and H are independent

8
e) empty, since F and H are mutually exclusive

Ans: b
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

30. Consider the following sample space, S, and several events defined on it. S = {Albert, Betty,
Abel, Jack, Patty, Meagan}, and the events are: F = {Betty, Patty, Meagan}, H = {Abel,
Meagan}, and P = {Betty, Abel}. The complement of F is ___________.
a) {Albert, Betty, Jack, Patty}
b) {Betty, Patty, Meagan}
c) {Albert, Abel, Jack}
d) {Betty, Abel}
e) {Meagan}

Ans: c
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

31. If X and Y are mutually exclusive, then _______.

a) the probability of the union is zero
b) P(X) = 1 - P(Y)
c) the probability of the intersection is zero
d) the probability of the union is one
e) P(Y) = P(X)

Ans: c
Response: See section 4.3 Structure of Probability
Difficulty: Easy
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

9
32. Let A be the event that a student is enrolled in an accounting course, and let S be the event
that a student is enrolled in a statistics course. It is known that 30% of all students are enrolled
in an accounting course and 40% of all students are enrolled in statistics. Included in these
numbers are 15% who are enrolled in both statistics and accounting. Find P(S).
a) 0.15
b) 0.30
c) 0.40
d) 0.55
e) 0.60

Ans: c
Response: See section 4.4 Marginal, Union, Joint, and Conditional Probabilities
Difficulty: Easy
Learning Objective: 4.4: Compare marginal, union, joint, and conditional probabilities by
defining each one.

33. Let A be the event that a student is enrolled in an accounting course, and let S be the event
that a student is enrolled in a statistics course. It is known that 30% of all students are enrolled
in an accounting course and 40% of all students are enrolled in statistics. Included in these
numbers are 15% who are enrolled in both statistics and accounting. Find the probability that a
student is in accounting and is also in statistics.
a) 0.15
b) 0.70
c) 0.55
d) 0.12
e) 0.60

Ans: a
Response: See section 4.4 Marginal, Union, Joint, and Conditional Probabilities
Difficulty: Easy
Learning Objective: 4.4: Compare marginal, union, joint, and conditional probabilities by
defining each one.

34. Let A be the event that a student is enrolled in an accounting course, and let S be the event
that a student is enrolled in a statistics course. It is known that 30% of all students are enrolled
in an accounting course and 40% of all students are enrolled in statistics. Included in these
numbers are 15% who are enrolled in both statistics and accounting. A student is randomly
selected, and it is found that the student is enrolled in accounting. What is the probability that
this student is also enrolled in statistics?
a) 0.15
b) 0.75

10
c) 0.375
d) 0.50
e) 0.80

Ans: d
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

35. Let A be the event that a student is enrolled in an accounting course, and let S be the event
that a student is enrolled in a statistics course. It is known that 30% of all students are enrolled
in an accounting course and 40% of all students are enrolled in statistics. Included in these
numbers are 15% who are enrolled in both statistics and accounting. A student is randomly
selected, what is the probability that the student is enrolled in either accounting or statistics or
both?
a) 0.15
b) 0.85
c) 0.70
d) 0.55
e) 0.90

Ans: d
Response: See section 4.5 Addition Laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

36. Abel Alonzo, Director of Human Resources, is exploring employee absenteeism at the Plano
Power Plant. Ten percent of all plant employees work in the finishing department; 20% of all
plant employees are absent excessively; and 7% of all plant employees work in the finishing
department and are absent excessively. A plant employee is selected randomly; F is the event
"works in the finishing department;" and A is the event "is absent excessively." P(A È F) =
_____________.
a) 0.07
b) 0.10
c) 0.20
d) 0.23
e) 0.37

Ans: d
Response: See section 4.5 Addition Laws
Difficulty: Medium

11
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

37. Abel Alonzo, Director of Human Resources, is exploring employee absenteeism at the Plano
Power Plant. Ten percent of all plant employees work in the finishing department; 20% of all
plant employees are absent excessively; and 7% of all plant employees work in the finishing
department and are absent excessively. A plant employee is selected randomly; F is the event
"works in the finishing department;" and A is the event "is absent excessively." P(A|F) =
_____________.
a) 0.37
b) 0.70
c) 0.13
d) 0.35
e) 0.80

Ans: b
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

38. Abel Alonzo, Director of Human Resources, is exploring employee absenteeism at the Plano
Power Plant. Ten percent of all plant employees work in the finishing department; 20% of all
plant employees are absent excessively; and 7% of all plant employees work in the finishing
department and are absent excessively. A plant employee is selected randomly; F is the event
"works in the finishing department;" and A is the event "is absent excessively." P(F|A) =
_____________.
a) 0.35
b) 0.70
c) 0.13
d) 0.37
e) 0.10

Ans: a
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

12
39. Max Sandlin is exploring the characteristics of stock market investors. He found that sixty
percent of all investors have a net worth exceeding $1,000,000; 20% of all investors use an
online brokerage; and 10% of all investors a have net worth exceeding $1,000,000 and use an
online brokerage. An investor is selected randomly, and E is the event "net worth exceeds
$1,000,000" and O is the event "uses an online brokerage." P(O È E) = _____________.
a) 0.17
b) 0.50
c) 0.80
d) 0.70
e) 0.10

Ans: d
Response: See section 4.5 Additional Laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

40. Max Sandlin is exploring the characteristics of stock market investors. He found that sixty
percent of all investors have a net worth exceeding $1,000,000; 20% of all investors use an
online brokerage; and 10% of all investors a have net worth exceeding $1,000,000 and use an
online brokerage. An investor is selected randomly, and E is the event "net worth exceeds $1,
000, 000," and O is the event "uses an online brokerage." P(O|E) = _____________.
a) 0.17
b) 0.50
c) 0.80
d) 0.70
e) 0.88

Ans: a
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

41. Given P(A) = 0.40, P(B) = 0.50, P(A Ç B) = 0.15. Find P(A È B).
a) 0.90
b) 1.05
c) 0.75
d) 0.65
e) 0.60

Ans: c
Response: See section 4.5 Additional Laws

13
Difficulty: Easy
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

42. Given P (A) = 0.40, P (B) = 0.50, P (A Ç B) = 0.15. Find P (A|B).

a) 0.20
b) 0.80
c) 0.30
d) 0.375
e) 0.15

Ans: c
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

43 Given P (A) = 0.40, P (B) = 0.50, P (A Ç B) = 0.15. Find P (B|A).

a) 0.20
b) 0.80
c) 0.30
d) 0.375
e) 0.15

Ans: d
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

44. Given P (A) = 0.40, P (B) = 0.50, P (A Ç B) = 0.15. Which of the following is true?
a) A and B are independent
b) A and B are mutually exclusive
c) A and B are collectively exhaustive
d) A and B are not independent
e) A and B are complimentary

Ans: d
Response: See section 4.7 Conditional Probability
Difficulty: Hard
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

14
45. An automobile dealer wishes to investigate the relation between the gender of the buyer and
type of vehicle purchased. Based on the following joint probability table that was developed
from the dealer’s records for the previous year, P (Male) = ________

Type of Buyer Gender

Vehicle Female Male Total
SUV
Not SUV .32 .48
Total .40 1.00

a) 0.48
b) 0.50
c) 0.20
d) 0.02
e) 0.60

Ans: e
Response: See section 4.5 addition Laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

46. An automobile dealer wishes to investigate the relation between the gender of the buyer and
type of vehicle purchased. Based on the joint probability table below that was developed from
the dealer’s records for the previous year, P (Female Ç SUV) = _______.

Type of Buyer Gender

Vehicle Female Male Total

SUV
Not SUV .30 .40
Total .60 1.00

a) 0.30
b) 0.40
c) 0.12
d) 0.10
e) 0.60

Ans: d
Response: See section 4.6 Multiplication Laws

15
Difficulty: Medium
Learning Objective: 4.6 Calculate joint probabilities of both independent and dependent events
using the general and special laws of multiplication.

47. An automobile dealer wishes to investigate the relation between the gender of the buyer and
type of vehicle purchased. Based on the following joint probability table that was developed
from the dealer’s records for the previous year, P (Female) = __________.

Type of Buyer Gender

Vehicle Female Male Total

SUV
Not SUV .30 .40
Total .60 1.00

a) 0.30
b) 0.40
c) 0.12
d) 0.10
e) 0.60

Ans: b
Response: See section 4.5 Addition Laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

48. An automobile dealer wishes to investigate the relation between the gender of the buyer and
type of vehicle purchased. Based on the following joint probability table that was developed
from the dealer’s records for the previous year, P (SUV) = ___________.

Type of Buyer Gender

Vehicle Female Male Total

SUV
Not SUV .30 .40
Total .60 1.00

a) 0.30
b) 0.40
c) 0.12
d) 0.10

16
e) 0.60

Ans: a
Response: See section 4.5 Addition Laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

49. Meagan Dubean manages a portfolio of 200 common stocks. Her staff classified the
portfolio stocks by 'industry sector' and 'investment objective.'

Investment Industry Sector

Objective Electronics Airlines Healthcare Total
Growth 100 10 40 150
Income 20 20 10 50
Total 120 30 50 200

If a stock is selected randomly from Meagan's portfolio, P (Growth) = _______.

a) 0.50
b) 0.83
c) 0.67
d) 0.75
e) 0.90

Ans: d
Response: See section 4.5 Addition Laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

50. Meagan Dubean manages a portfolio of 200 common stocks. Her staff classified the
portfolio stocks by 'industry sector' and 'investment objective.'

Investment Industry Sector

Objective Electronics Airlines Healthcare Total
Growth 100 10 40 150
Income 20 20 10 50
Total 120 30 50 200

If a stock is selected randomly from Meagan's portfolio, P (Healthcare È Electronics) =

_______.
a) 0.25

17
b) 0.85
c) 0.60
d) 0.75
e) 0.90

Ans: b
Response: See section 4.5 Addition laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

51. Meagan Dubean manages a portfolio of 200 common stocks. Her staff classified the
portfolio stocks by 'industry sector' and 'investment objective.'

Investment Industry Sector

Objective Electronics Airlines Healthcare Total
Growth 100 10 40 150
Income 20 20 10 50
Total 120 30 50 200

If a stock is selected randomly from Meagan's portfolio, P (Airlines|Income) = _______.

a) 0.10
b) 0.40
c) 0.25
d) 0.67
e) 0.90

Ans: b
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

52. Meagan Dubean manages a portfolio of 200 common stocks. Her staff classified the
portfolio stocks by 'industry sector' and 'investment objective.'

Investment Industry Sector

Objective Electronics Airlines Healthcare Total
Growth 100 10 40 150
Income 20 20 10 50

18
 Total 120 30 50 200

Which of the following statements is not true?

a) Growth and Income are complementary events.
b) Electronics and Growth are dependent.
c) Electronics and Healthcare are mutually exclusive.
d) Airlines and Healthcare are collectively exhaustive.
e) Growth and Income are collectively exhaustive.

Ans: d
Response: See section 4.3 Structure of Probability
Difficulty: Hard
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

53. Meagan Dubean manages a portfolio of 200 common stocks. Her staff classified the
portfolio stocks by 'industry sector' and 'investment objective.'

Investment Industry Sector

Objective Electronics Airlines Healthcare Total
Growth 84 21 35 140
Income 36 9 15 60
Total 120 30 50 200

Which of the following statements is true?

a) Growth and Healthcare are complementary events.
b) Electronics and Growth are independent.
c) Electronics and Growth are mutually exclusive.
d) Airlines and Healthcare are collectively exhaustive.
e) Electronics and Healthcare are collectively exhaustive.

Ans: b
Response: See section 4.6 Multiplication Laws
Difficulty: Hard
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

54. The table below provides summary information about students in a class. The sex of each
individual and the major is given.

19
 Male Female Total
Accounting 12 18 30
Finance 10 8 18
Other 26 26 52
Total 48 52 100

If a student is randomly selected from this group, what is the probability that the student is male?
a) 0.12
b) 0.48
c) 0.50
d) 0.52
e) 0.68

Ans: b
Response: See section 4.5 Addition Laws
Difficulty: Easy
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

55. The table below provides summary information about students in a class. The sex of each
individual and the major is given.

Male Female Total

Accounting 12 18 30
Finance 10 8 18
Other 26 26 52
Total 48 52 100

If a student is randomly selected from this group, what is the probability that the student is a
female who majors in accounting?
a) 0.18
b) 0.60
c) 0.35
d) 0.40
e) 0.78

Ans: a
Response: See Section 4.5 Addition Laws
Difficulty: Easy
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

20
56. The table below provides summary information about students in a class. The sex of each
individual and the major is given.

Male Female Total

Accounting 12 18 30
Finance 10 8 18
Other 26 26 52
Total 48 52 100

A student is randomly selected from this group, and it is found that the student is majoring in
finance. What is the probability that the student is a male?
a) 0.21
b) 0.10
c) 0.56
d) 0.48
e) 0.78

Ans: c
Response: See section 4.7 Conditional Probability
Difficulty: Hard
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

57. A market research firm is investigating the appeal of three package designs. The table below
gives information obtained through a sample of 200 consumers. The three package designs are
labeled A, B, and C. The consumers are classified according to age and package design
preference.

A B C Total
Under 25 years 22 34 40 96
25 or older 54 28 22 104
Total 76 62 62 200

If one of these consumers is randomly selected, what is the probability that the person prefers
design A?
a) 0.76
b) 0.38
c) 0.33
d) 0.22
e) 0.39

Ans: b

21
Response: See section 4.5 Addition Laws
Difficulty: Easy
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.

58. A market research firm is investigating the appeal of three package designs. The table below
gives information obtained through a sample of 200 consumers. The three package designs are
labeled A, B, and C. The consumers are classified according to age and package design
preference.

A B C Total
Under 25 years 22 34 40 96
25 or older 54 28 22 104
Total 76 62 62 200

If one of these consumers is randomly selected, what is the probability that the person prefers
design A and is under 25?
a) 0.22
b) 0.11
c) 0.18
d) 0.54
e) 0.78

Ans: b
Response: See section 4.5 Addition Laws
Difficulty: Easy
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary.
59. A market research firm is investigating the appeal of three package designs. The table below
gives information obtained through a sample of 200 consumers. The three package designs are
labeled A, B, and C. The consumers are classified according to age and package design
preference.

A B C Total
Under 25 years 22 34 40 96
25 or older 54 28 22 104
Total 76 62 62 200

If one of these consumers is randomly selected and is under 25, what is the probability that the
person prefers design A?
a) 0.22
b) 0.23
c) 0.29
d) 0.18
e) 0.78

22
Ans: b
Response: See section 4.7 Conditional Probability
Difficulty: Hard
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent

60. A market research firm is investigating the appeal of three package designs. The table below
gives information obtained through a sample of 200 consumers. The three package designs are
labeled A, B, and C. The consumers are classified according to age and package design
preference.

A B C Total
Under 25 years 22 34 40 96
25 or older 54 28 22 104
Total 76 62 62 200

If one of these consumers is randomly selected and prefers design B, what is the probability that
the person is 25 or older?
a) 0.28
b) 0.14
c) 0.45
d) 0.27
e) 0.78

Ans: c
Response: See section 4.7 Conditional Probability
Difficulty: Hard
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

61. A market research firm is investigating the appeal of three package designs. The table below
gives information obtained through a sample of 200 consumers. The three package designs are
labeled A, B, and C. The consumers are classified according to age and package design
preference.

A B C Total
Under 25 years 22 34 40 96
25 or older 54 28 22 104
Total 76 62 62 200

Are “B” and “25 or older” independent and why or why not?

23
a) No, because P (25 or over | B) ¹ P (B)
b) Yes, because P (B) = P(C)
c) No, because P (25 or older | B) ¹ P (25 or older)
d) Yes, because P (25 or older Ç B) ¹ 0
e) No, because age and package design are different things

Ans: c
Response: See section 4.7 Conditional Probability
Difficulty: Hard
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

62. An analysis of personal loans at a local bank revealed the following facts: 10% of all
personal loans are in default (D), 90% of all personal loans are not in default (D΄), 20% of those
in default are homeowners (H | D), and 70% of those not in default are homeowners (H | D΄). If
a personal loan is selected at random P (H Ç D’) = ___________.
a) 0.20
b) 0.63
c) 0.90
d) 0.18
e) 0.78

Ans: b
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Medium
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

63. An analysis of personal loans at a local bank revealed the following facts: 10% of all
personal loans are in default (D), 90% of all personal loans are not in default (D΄), 20% of those
in default are homeowners (H | D), and 70% of those not in default are homeowners (H | D΄). If a
personal loan is selected at random, P (D | H) = ___________.
a) 0.03
b) 0.63
c) 0.02
d) 0.18
e) 0.78

Ans: a
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Hard
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

24
64. A market research firms conducts studies regarding the success of new products. The
company is not always perfect in predicting the success. Suppose that there is a 50% chance that
any new product would be successful (and a 50% chance that it would fail). In the past, for all
new products that ultimately were successful, 80% were predicted to be successful (and the other
20% were inaccurately predicted to be failures). Also, for all new products that were ultimately
failures, 70% were predicted to be failures (and the other 30% were inaccurately predicted to be
successes). What is the a priori probability that a new product would be a success?
a) 0.50
b) 0.80
c) 0.70
d) 0.60
e) 0.95

Ans: a
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Medium
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

65. A market research firms conducts studies regarding the success of new products. The
company is not always perfect in predicting the success. Suppose that there is a 50% chance that
any new product would be successful (and a 50% chance that it would fail). In the past, for all
new products that ultimately were successful, 80% were predicted to be successful (and the other
20% were inaccurately predicted to be failures). Also, for all new products that were ultimately
failures, 70% were predicted to be failures (and the other 30% were inaccurately predicted to be
successes). For any randomly selected new product, what is the probability that the market
research firm would predict that it would be a success?
a) 0.80
b) 0.50
c) 0.45
d) 0.55
e) 0.95

Ans: d
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Hard
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

66. A market research firm conducts studies regarding the success of new products. The
company is not always perfect in predicting the success. Suppose that there is a 50% chance that
any new product would be successful (and a 50% chance that it would fail). In the past, for all

25
new products that ultimately were successful, 80% were predicted to be successful (and the other
20% were inaccurately predicted to be failures). Also, for all new products that were ultimately
failures, 70% were predicted to be failures (and the other 30% were inaccurately predicted to be
successes). If the market research predicted that the product would be a success, what is the
probability that it would actually be a success?
a) 0.27
b) 0.73
c) 0.80
d) 0.24
e) 1.00

Ans: b
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Hard
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

67. Assigning probability 1/3 of rolling a 4 or 5 on a single die is an example of assigning

probabilities using the ________________ method
a) subjective probability
b) relative frequency
c) classical probability
d) a priori probability
e) a posterior probability

Ans: c
Response: See section 4.2 Methods of Assigning Probabilities
Difficulty: Medium
Learning Objective: 4.2: Differentiate among three methods of assigning probabilities: the
classical method, relative frequency of occurrence, and subjective probability.

68. The number of different committees of 2 students that can be chosen from a group of 5
students is
a) 20
b) 2
c) 5
d) 10
e) 1

Ans: d
Response: See section 4.3 Structure of Probability
Difficulty: Medium

26
Learning Objective: 4.3: Deconstruct the elements of probability by defining experiments,
sample spaces, and events, classifying events as mutually exclusive, collectively exhaustive,
complementary, or independent, and counting possibilities.

69. It is known that 20% of all students in some large university are overweight, 20% exercise
regularly and 2% are overweight and exercise regularly. What is the probability that a randomly
selected student is either overweight or exercises regularly or both?
a) 0.40
b) 0.38
c) 0.20
d) 0.42
e) 0.10

Ans: b
Response: See section 4.5 addition laws
Difficulty: Medium
Learning Objective: 4.5: Calculate probabilities using the general law of addition, along with a
joint probability table, the complement of a union, or the special law of addition if necessary

70. Suppose 5% of the population have a certain disease. A laboratory blood test gives a positive
reading for 95% of people who have the disease. What is the probability of testing positive and
having the disease?
a) 0.0475
b) 0.95
c) 0.05
d) 0.9
e)0.02

Ans: a
Response: See section 4.6 Multiplication Laws
Difficulty: Hard

Learning Objective: 4.6 Calculate joint probabilities of both independent and dependent events
using the general and special laws of multiplication.

71. Suppose that 5% of all TVs made by some Company in 2010 are defective. If 2 of these TVs
are randomly selected what is the probability that both are defective?
a) 0.95
b) 0.0025
c) 0.9025

27
d) 0.0475
e) 0.1

Ans: b
Response: See section 4.6 Multiplication Laws
Difficulty: Medium
Learning Objective: 4.6 Calculate joint probabilities of both independent and dependent events
using the general and special laws of multiplication.

72. It is known that 20% of all students in some large university are overweight, 20% exercise
regularly and 2% are overweight and exercise regularly. What is the probability that a randomly
selected student is overweight given that this student exercises regularly?
a) 0.40
b) 0.38
c) 0.20
d) 0.42
e) 0.10

Ans: e
Response: See section 4.7 Conditional Probability
Difficulty: Medium
Learning Objective: 4.7: Calculate conditional probabilities with various forms of the law of
conditional probability, and use them to determine if two events are independent.

73. Suppose 5% of the population have a certain disease. A laboratory blood test gives a positive
reading for 95% of people who have the disease and 10% positive reading of people who do not
have the disease. . What is the probability of testing positive?
a) 0.0475
b) 0.1425
c) 0.95
d) 0.9
e) 0.3333

Ans: b
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Hard
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

74. Suppose 5% of the population have a certain disease. A laboratory blood test gives a positive
reading for 95% of people who have the disease and 10% positive reading of people who do not

28
have the disease. . What is the probability that a randomly selected person has the disease given
that this person is testing positive?
a) 0.0475
b) 0.1425
c) 0.95
d) 0.9
e) 0.3333

Ans: e
Response: See section 4.8 Revision of Probabilities: Bayes’ Rule
Difficulty: Hard
Learning Objective: 4.8: Calculate conditional probabilities using Bayes’ rule.

29