Statistics Questions

1) Which of the following is an example of a random experiment?

A) A customer inspects a delivery and finds an error.
B) Marketing budgets a 10% increase in advertising.
C) The post office misplaces a letter.
D) A student increases her average study time/week and improves her grades.

2) The set of all possible outcomes from a random experiment is called the sample:
A) population.
B) space.
C) probability.
D) event.

3) Which of the following is not an example of a random experiment?

A) daily change of stock market index prices
B) customer makes a purchase or not
C) a survey to rate quality of service
D) coin-toss, heads or tails

4) The possible outcomes from a random experiment are called:

A) sample space.
B) parameters.
C) basic groups.
D) basic outcomes.

5) A subset of outcomes is defined as a(n):

A) sample.
B) event.
C) outcome.
D) probability.

6) When events have no common basic outcomes, they are said to be:
A) mutually exclusive.
B) mutually related.
C) mutually apart.
D) collectively exhaustive.

7) If the union of several events covers the entire sample space, it is said these events are:
A) mutually exclusive.
B) mutually related.
C) mutually apart.
D) collectively exhaustive.
Course LO: Identify and apply the basic concepts and tools of probability

8) The proportion of times that an event will occur, assuming that all outcomes in a sample space are
equally likely to occur, is called:
A) objective probability.
B) classical probability.
C) relative frequency probability.
D) subjective probability.

9) ________ probability is the number of events in the population that meet the condition divided by
the total number in the population.
A) Objective
B) Classical
C) Relative frequency
D) Subjective

10) The expression of an individual's degree of belief about the chance that an event will occur is
called ________ probability.
A) objective
B) classical
C) relative frequency
D) subjective

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

Suppose you roll a pair of dice. Let A be the event that you observe an even number. Let B be the
event that you observe a number greater than seven.

11) What is the intersection of events A and B?

A) [8, 10, 12]
B) [7, 8, 9, 10, 11, 12]
C) [2, 4, 6, 8, 10, 12]
D) [2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12]

12) What is the union of events A and B?

A) [8, 9, 10, 11, 12]
B) [8, 10, 12]
C) [2, 4, 6, 8, 9, 10, 11, 12]
D) [2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12]

13) What is the complement of event A?

A) [8, 9, 10, 11, 12]
B) [3, 5, 7, 9, 11]
C) [1, 5, 10, 11, 12]
D) [8, 10, 12]

14) What is the complement of event B?

A) [3, 5, 7, 9, 11]
B) [2, 4, 6, 8, 10, 12]
C) [2, 3, 4, 5, 6, 7]
D) [7, 8, 9, 10, 11, 12]

15) What is ∩ B?
A) [9, 11]
B) [2, 3, 4, 6]
C) [5, 7, 8, 10, 12]
D) [3, 5]

16) What is A ∩ ?
A) [9, 11]
B) [8, 10, 12]
C) [3, 5, 7]
D) [2, 4, 6]

17) What is ∩ ?
A) [2, 4, 6]
B) [3, 5, 7]
C) [8, 9, 10, 11, 12]
D) [∅]

18) What is ∪ ?
A) [2, 3, 4, 5, 6, 7]
B) [3, 5, 7]
C) [2, 3, 4, 5, 6, 7, 9, 11]
D) [2, 4, 6]

19) What is ∪ B?
A) [4, 5, 7, 8, 11, 12]
B) [8, 9, 10, 11, 12]
C) [2, 3, 4, 5, 6, 7]
D) [3, 5, 7, 8, 9, 10, 11, 12]

20) What is A ∪ ?
A) [2, 3, 4, 5, 6, 7, 8, 10, 12]
B) [3, 5, 7, 8, 10, 12]
C) [5, 7, 8, 10, 12]
D) [5, 6, 7, 8, 9, 10, 11, 12]

21) What does the complement rule state?

A) That events A and are not mutually exclusive
B) The intersection of events A and is the empty set ∅.
C) That events A and are not collectively exhaustive.
D) The union of events A and is the empty set ∅.
22) The probability of the intersection of events A and B is denoted by:
A) A ∩ B.
B) P(A ∩ B).
C) A ∪ B.
D) P(A ∪ B).

23) If the probability of occurrence of event A is not affected by the occurrence of event B, then A and
B are said to be:
A) mutually exclusive.
B) statistically independent.
C) collectively exhaustive.
D) basic events.
24) Suppose you roll a pair of dice. Let A be the event that you roll an even number. Let B be the event
that you roll an odd number. Which of the following statements is true?
A) The events A and B are not mutually exclusive.
B) The intersection of A and B is the empty set ∅.
C) The events A and B are not collectively exhaustive.
D) The complement of event B is the set [1, 3, 5, 7, 9, 11].

25) Which of the following statements is always true for any two events A and B defined on a sample
space S?
A) The complement of event A is event B.
B) The intersection of A and B is the set of all basic outcomes in either A or B.
C) If events A and B are mutually exclusive, then A ∩ B = S.
D) If events A and B are collectively exhaustive, then A ∩ B = S.

26) Which of the following statements is always true for any two events A and B defined on a sample
space S?
A) If the complement of event A is the empty set, then event A is the sample space S.
B) If the union of events A and B is not the empty set, ∅ then A ∩ B = ∅.
C) If events A and B are mutually exclusive, then A ∪ B = S.
D) If events A and B are collectively exhaustive, then A ∪ B = ∅.

27) Which of the following statements is true for any two events A and B defined on a sample space
S?
A) If the intersection of events A and B is the empty set, then A and B are collectively exhaustive.
B) If the union of events A and B is the empty set, then each of A and B is the empty set.
C) If events A and B are collectively exhaustive, then A ∪ B ≠ ∅.
D) If events A and B are mutually exclusive and collectively exhaustive, then the union of A and B is
not necessarily the sample space.

28) Which term is used to describe the probability of the intersection of events A and B?
A) subjective probability
B) marginal probability
C) joint probability
D) conditional probability

29) Two events A and B defined on a sample space S are said to be collectively exhaustive if:
A) A ∩ B = ∅
B) A ∪ B = ∅
C) A ∩ B = S
D) A ∪ B = S

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

The production manager at a local manufacturing plant is concerned about work stoppages in the
four production lines. In particular, the manager is evaluating the likelihood of the next stoppage
occurring on production line 1.

30) If each of the lines is equally likely to have the next stoppage, the probability that production line
1 is stopped next is 25%. This is an example of:
A) subjective probability.
B) classical probability.
C) relative frequency probability.
D) Bayesian probability.

31) Based on previous stoppage records, the manager figures that the probability that production line
1 is stopped next is 25%. This is an example of:
A) subjective probability.
B) classical probability.
C) relative frequency probability.
D) Bayesian probability.

32) Based on his knowledge of the causes of stoppages, the manager states that the probability that
production line 1 is stopped next is 25%. This is an example of:
A) subjective probability.
B) classical probability.
C) relative frequency probability.
D) Bayesian probability.

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

In a furniture manufacturing plant, a customer survey indicates that blemishes in the finish are a
major concern. The table shown below displays a quality manager's probability assessment of the
number of defects in the finish of new furniture.

Number of Defects 0 1 2 3 4 5
Probability 0.34 0.25 0.19 0.11 0.07 0.04

33) Let event A be that there are more than three defects and let event B be that there are four or fewer
defects. Which of the following statements is true?
A) P(A ∩ B) = 0.18
B) P(A ∪ B) = 0.07
C) Events A and B are collectively exhaustive.
D) Events A and B are mutually exclusive.
Answer: C
Difficulty: Moderate
Topic: Probability and Its Postulates
AACSB: Analytic Skills
Course LO: Identify and apply the basic concepts and tools of probability

34) Let event A be that there are more than two defects and let event B be that there are four or fewer
defects. Which of the following statements is true?
A) P(A ∩ B) = 0.18
B) P(A ∪ B) = 0.07
C) P( ) = 0.58
D) P( ) = 0.89

35) Let A be the event that there is at least one defect and let event B be that there is at most three
defects. Which of the following statements is true?
A) P(A ∩ B) = 0.55
B) P(A ∪ B) = 0.96
C) P(A) = 0.34
D) P( ) = 0.89

36) A gumball machine has five different colored gumballs: red, blue, white, green, and yellow. If you
buy three gumballs, how many different combinations of colors could you buy?
A) 60
B) 20
C) 10
D) 6

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

Ted's Surfboard Shop makes surfboards by hand. The number of surfboards that Ted makes in a
week depends on the wave conditions. Ted has estimated the following probabilities for surfboard
production for the next week.

Number of Surfboards 5 6 7 8 9 10
Probability 0.13 0.22 0.31 0.17 0.13 0.04

37) Let event A be that Ted produces more than seven surfboards and let event B be that he produces
exactly six surfboards. Which of the following statements is true?
A) P(A ∩ B)=0.31
B) events A and B are collectively exhaustive
C) P( ∪ )=0.44
D) events A and B are mutually exclusive

38) Let event A be that Ted produces more than six surfboards, and let event B be that he produces
less than eight surfboards. Which of the following statements is true?
A) P(A ∩ B) = 0.75
B) Events A and B are collectively exhaustive.
C) P( ) = 0.53
D) Events A and B are mutually exclusive.

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

The probability that interest rates on housing loans will go up in the next 6 months is estimated to be
0.20. The probability that house sales will decrease is estimated to be 0.6. The probability that interest
rates will go up and house sales will decrease is estimated to be 0.15.

39) The probability that interest rates increase and house sales decrease is:
A) 0.75
B) 0.85
C) 0.71
D) 0.15
40) The probability of an increase in interest rates and not a decrease in house sales is:
A) 0.20
B) 0.05
C) 0.25
D) 0.50

41) The probability of a decrease in house sales and not an increase in interest rates is:
A) 0.45
B) 0.25
C) 0.20
D) 0.05

42) The probability of not an increase in interest rates and not a decrease in house sales is:
A) 0.50
B) 0.35
C) 0.20
D) 0.05

43) The probability that house sales will go down given that interest rates will go up is:
A) 0.95
B) 0.90
C) 0.75
D) 0.80

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

A multiple choice quiz has five questions, each with five answers, A through E. Assume you just
guess on all of the questions.

44) What is the probability that you guessed on all five questions right?
A) 0.00032
B) 0.03125
C) 0.20
D) 0.50

45) What is the probability that you get exactly three questions right?
A) 0.00032
B) 0.0016
C) 0.008
D) 0.04

46) A research project on retention at a large university indicated that 20% of the students had a
problem with stress while 25% reported problems with financial resources and 15% had a problem
with both. What is the probability that a particular student has a problem with either stress or
financial resources?
A) 0.15
B) 0.30
C) 0.45
D) 0.60
47) The probability that an employee at a company uses illegal drugs is 0.08. The probability than an
employee is male is 0.55. Assuming that these events are independent, what is the probability that a
randomly chosen employee is a male drug user?
A) 0.742
B) 0.145
C) 0.044
D) 0.006

48) A survey of executives revealed that 35% of them regularly read The Wall Street Journal, 20% read
Forbes, and 10% read both The Wall Street Journal and Forbes. What is the probability that a
particular executive reads either The Wall Street Journal or Forbes?
A) 0.45
B) 0.35
C) 0.55
D) 0.65

49) In a longitudinal economic development study, market research indicated that the odds of a new
business succeeding after five years are 1 to 9. That means that the probability of a business actually
succeeding is:
A) 0.11
B) 0.10
C) 0.09
D) 0.08

50) A junior executive looking at his business attire in his closet notes that he has five suits, six shirts,
and three pairs of shoes. He is going on a business trip and needs to take two of each. How many
different combinations of outfits could he take?
A) 680
B) 320
C) 450
D) 224

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

A recent marketing survey related consumers' awareness of a new marketing campaign with their
rating of the product. Consumers rated their awareness as low, medium, or high, and rated the
product as poor, fair, or good. The results are presented below.

51) What is the probability that a consumer had low awareness?

A) 0.10
B) 0.14
C) 0.23
D) 0.07
52) What is the probability that a consumer who ranked the product as fair had a high awareness of
the ad campaign?
A) 0.06
B) 0.26
C) 0.23
D) 0.40

53) What is the probability that a consumer who had high awareness of the ad campaign ranked the
product as good?
A) 0.675
B) 0.385
C) 0.775
D) 0.325

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

A manufacturer of automobiles conducted a market survey. Eighty percent of the customers want
better fuel efficiency, while 55% want a vehicle navigation system and 45% percent want both
features.

54) The probability that a person wants better fuel efficiency and also a vehicle navigation system is:
A) 0.90
B) 0.10
C) 0.45
D) 0.35

55) The probability that a person wants better fuel efficiency but not a vehicle navigation system is:
A) 0.90
B) 0.10
C) 0.45
D) 0.35

56) The probability that a person wants a vehicle navigation system but not better fuel efficiency is:
A) 0.90
B) 0.10
C) 0.45
D) 0.35

57) The probability that a person wants neither better fuel efficiency nor a vehicle navigation system
is:
A) 0.90
B) 0.10
C) 0.45
D) 0.35

58) The probability that a person wants either better fuel efficiency or a vehicle navigation system is:
A) 0.90
B) 0.10
C) 0.45
D) 0.35
59) The probability that a person does not want a vehicle navigation system is:
A) 0.45
B) 0.10
C) 0.90
D) 0.35

60) The probability that a person wants a better fuel efficiency given that he wants a vehicle
navigation system is approximately:
A) 0.90
B) 0.45
C) 0.82
D) 0.41

61) The probability that a person wants a vehicle navigation system given that he wants a better fuel
efficiency is approximately:
A) 0.80
B) 0.40
C) 0.45
D) 0.56

62) A junior executive looking at his business attire in his closet notes that he has eight suits, six shirts,
and four pairs of shoes. He is going on a business trip and needs to take two of each. How many
different combinations of outfits could he take?
A) 2240
B) 3320
C) 1680
D) 2520

63) The purchasing agent for a municipality has contracted with a local car dealer to purchase four
cars. The dealer has 25 cars on his lot; 10 red, 7 blue, 6 white, and 2 purple. If the purchasing agent has
no control over the colors he receives, what is the probability that he receives at least one of the
purple cars?
A) 0.33
B) 0.30
C) 0.36
D) 0.39

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

A recent survey showed that 15% of computer programmers have experienced some form of wrist
pain from typing, and that 25% are taking aspirin daily. Six percent of all programmers have both
experienced some form of wrist pain from typing and taken aspirin on a daily basis.

64) What is the probability that a programmer who has wrist pain takes aspirin on a daily basis?
A) 0.40
B) 0.24
C) 0.57
D) 0.66

65) What is the probability that a programmer who takes aspirin on a daily basis has wrist pain?
A) 0.09
B) 0.19
C) 0.24
D) 0.40
66) What is the probability that a programmer has wrist pain and does not take aspirin on a daily
basis?
A) 0.25
B) 0.15
C) 0.19
D) 0.09

67) What is the probability that a programmer does not have wrist pain and does not take aspirin on a
daily basis?
A) 0.75
B) 0.66
C) 0.85
D) 0.25

68) What is the probability that a programmer has wrist pain or takes aspirin on a daily basis?
A) 0.66
B) 0.25
C) 0.34
D) 0.15

69) As the office manager for a medical office with ten doctors, you are responsible for developing the
roster for the on-call shift for the next three nights. How many different ways could you assign a
different doctor to each of the next three nights?
A) 1020
B) 840
C) 720
D) 640

70) Which of the following statements is true?

A) If events A and B are complements, then the intersection of A and the complement of B is the
sample space.
B) If events A and B are mutually exclusive, then the intersection of A and B is the empty set.
C) If events A and B are mutually exclusive, then the union of A and B is the sample space.
D) If events A and B are mutually exclusive, then the union of A and B is the empty set.

71) In a recent article it was reported that 35.4% of all high school students smoke cigarettes. 65% of
these students plan on going to college. What is the probability that a randomly selected student
smokes cigarettes and plans on going to college?
A) 0.354
B) 0.230
C) 0.124
D) 0.412

72) An office of six people is plagued by high absenteeism. It is thought that the probability that an
employee is absent on a particular day is 0.03. Assuming that the event that one person is absent on a
particular day is independent of the absence of any other employee, what is the probability that at
least one employee is absent tomorrow?
A) 0.121
B) 0.180
C) 0.150
D) 0.167
73) A gumball machine has six red gumballs, four blue gumballs, and three yellow gumballs. If you
buy three gumballs, what is the probability that you get three different colors?
A) 0.252
B) 0.167
C) 0.125
D) 0.244

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

A survey of recent e-commerce start-up firms was undertaken at an industry convention.
Representatives of the firm were asked for the geographic location of the firm as well as the firm's
outlook for growth in the coming year. The results are provided below.

74) What is the probability that one of these start-up firms was from the Northeast?
A) 0.04
B) 0.12
C) 0.49
D) 0.33

75) Are the events "firm from the South" and "expects high growth" statistically independent?
A) Yes
B) No
C) Maybe
D) Unable to tell from the data

76) If the firm interviewed was from the West, what is the probability that it expected medium or
high growth?
A) 0.24
B) 0.35
C) 0.16
D) 0.46

77) If the firm interviewed was expecting medium or high growth, what is the probability of the firm
being located in the West?
A) 0.16
B) 0.31
C) 0.46
D) 0.27

78) In a survey of 100 large corporations, it was found that 72% offer some form of tuition assistance
plan for their workers. 64% of the 100 corporations offer both a tuition assistance plan as well as
provide dental insurance for dependents. What is the probability that a corporation that offers a
tuition assistance plan also offers dental insurance for dependents?
A) 0.89
B) 0.46
C) 0.64
D) 0.68

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

Given A= {E3, E4, E8, E10} and B = {E3, E4, E6, E9}

79) What is the intersection of A and B?

A) E3, E4
B) E3, E4, E6, E8, E9, E10
C) E1, E2, E5, E7
D) E6, E8, E9, E10

80) What is the union of A and B?

A) E3, E4
B) E3, E4, E6, E8, E9, E10
C) E1, E2, E5, E7
D) E6, E8, E9, E10

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

A supplier is evaluating a firm to manufacture a subassembly. Quality data from past inspections
reveal the following probabilities for number of defective parts in a shipment:

Number Defective 0 1 2 >2

Probability 0.80 0.10 0.06 0.04

81) What is the probability that there will be fewer than 2 defective parts in a shipment?
A) 0.20
B) 0.90
C) 0.86
D) 0.10
82) What is the probability that the shipment will have defective parts?
A) 0.20
B) 0.90
C) 0.86
D) 0.10

83) What is the probability that the shipment will have at least two defective parts?
A) 0.20
B) 0.90
C) 0.86
D) 0.10

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

In a recent survey of consumer confidence, 160 respondents were classified by their level of
education. The results of the survey are presented below.

84) What is the proportion of respondents who had medium or high confidence?
A) 0.330
B) 0.271
C) 0.719
D) 0.670

85) What proportion of respondents had at least some college education and had high confidence?
A) 0.131
B) 0.242
C) 0.558
D) 0.175

86) What proportion of respondents who had at least some college education also had high
confidence?
A) 0.239
B) 0.210
C) 0.364
D) 0.636

87) Are the events "had a college education" and "had high confidence" statistically independent?
A) Yes
B) No
C) Maybe
D) There is not sufficient information to determine.

88) If the odds for you getting a credit card solicitation in the mail this month are 1 to 4, then which of
the following statements is true?
A) The probability of getting a credit card solicitation is 0.25.
B) The probability of getting a credit card solicitation is 0.20.
C) The probability of getting a credit card solicitation is 0.80.
D) The probability of getting a credit card solicitation is 0.75.

89) Consider two events A and B. Which of the following statements is true?
A) If the probability of A given B is 0.4, then the probability of A given the complement of B is 0.6.
B) If the probability of A given B is 0.4, then the probability of the complement of A given the
complement of B is 0.6.
C) If the probability of A given B is 0.4, then the probability of the complement of A given B is 0.6
D) If the probability of A given B is 0.4 and the probability of A is 0.4, then events A and B are
mutually exclusive.

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

In a recent survey of college students, students where asked about their use of the Internet for
research. The information is displayed in the table below. Let A be the event that the student was a
business major. Let B be the event that the student uses the Internet for research.

Use Internet for

research Don't Use Internet
Business Students 0.38 0.22
Education Students 0.25 0.15

90) Which of the following is true?

A) P(A ∣ B) < P(B ∣ A)
B) P(A ∣ ) > P(B ∣ )
C) P(A ∩ B) = 0.85
D) Events A and B are statistically independent.

91) Which of the following is true?

A) P(A|B) = P(B|A)
B) P(A| ) < P(B| )
C) P(A ∩ B) = 0.60
D) Events A and B are statistically independent.

92) Which of the following is true?

A) P(A | B) = 0.81
B) P(A ∩ ) = 0.16
C) P( ∣ ) = 0.375
D) Events A and B are statistically independent.

93) Which of the following statements is not true?

A) An event A and its complement are always mutually exclusive.
B) A set of events is said to be collectively exhaustive if it includes all the possible outcomes of an
experiment.
C) The probability of event A and event B occurring must be equal to 1.
D) When the events within a set are both mutually exclusive and exhaustive, the sum of their
probabilities is 1.0.

94) Consider two events A and B. Which of the following statements is true?
A) If the probability of A given B is 0.4 and the probability of B is 0.6, then the probability of A is 0.2.
B) If the probability of A given B is 0.4 and the probability of A is 0.4, then events A and B are
statistically independent.
C) If the probability of A given B is 0.4 and the probability of the union of A and B is 0.7, then the
probability of A is 0.3.
D) If the probability of A given B is 0.6 and the probability of B is 0.4, then the probability of A is 0.2.

95) Which of the following best describes the addition rule of probabilities?
A) P(A ∪ B) = P(A) + P(B)
B) P(A ∪ B) = P(A) + P(B) - P(A ∩ B)
C) P(A ∪ B) = P(A) + P(B) + P(A ∩ B)
D) P(A ∩ B) = P(A) P(B)

96) An example of the classical approach to probability would be:

A) the estimate of number of defective parts based on previous production data.
B) your estimate of the probability of a pop quiz in class on a given day.
C) the annual estimate of the number of deaths of persons age 45.
D) the outcomes in a card game.

97) If A and B are independent events with P(A) = 0.60 and P(A | B) = 0.60, then P(B) is:
A) 1.20
B) 0.60
C) 0.36
D) Cannot be determined from the information given.

98) Which of the following is not an example of the relative frequency approach to probability?
A) The outcome of a game of craps based on your personal experience
B) The outcome of a game of roulette based on historical data
C) The outcome of a poker game based on the draw of one card
D) The actuarial schedule for a life insurance company

99) Which of the following statements is not true?

A) Two events A and B are mutually exclusive if event A occurs and event B cannot occur.
B) If events A and B occur at the same time, then A and B intersect.
C) If event A does not occur, then its complement will also not occur.
D) A union of events occurs when at least one event in a group occurs.
100) Which of the following statements is not true?
A) Events are independent when the occurrence of one event has no effect on the probability that
another will occur.
B) When events A and B are independent, then P(A ∩ B) = P(A) + P(B).
C) When events A and B are independent, then P(A ∩ B) = P(A) ∙ P(B).
D) When events A and B are independent, then P(A ∪ B) = P(A) + P(B) - P(A) ∙ P(B).

101) If P(A) = 0.20, P(B) = 0.40, and P(A ∩ B) = 0.08, then A and B are said to be:
A) dependent events.
B) independent events.
C) mutually exclusive events.
D) complementary events.

102) Two events A and B are said to be mutually exclusive if:

A) P(A | B) = 1
B) P(B | A) = 1
C) P(A ∩ B) = 1
D) P(A ∩ B) = 0

103) If P(A) = 0.84, P(B) = 0.76, and P(A ∪ B) = 0.90, then P(A ∩ B) is:
A) 0.06
B) 0.14
C) 0.70
D) 0.83

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

The joint probabilities shown in a table with two rows, A1 and A2, and two columns, B1 and B2 are as
follows: P(A1 ∩ B1) = 0.10, P(A1 ∩ B2) = 0.30, P(A2 ∩ B1) = 0.05, P(A2 ∩ B2) = 0.55

104) What is P(B1)?

A) 0.40
B) 0.60
C) 0.15
D) 0.85

105) What is P(B2)?

A) 0.40
B) 0.60
C) 0.15
D) 0.85

106) What is P(A1|B1), rounded to two decimals?

A) 0.33
B) 0.35
C) 0.65
D) 0.67
107) What is P(A1|B2), rounded to two decimals?
A) 0.33
B) 0.35
C) 0.65
D) 0.67

108) What is P(A2 |B1), rounded to two decimals?

A) 0.33
B) 0.35
C) 0.65
D) 0.67

109) What is P(A2 |B2), rounded to two decimals?

A) 0.33
B) 0.35
C) 0.65
D) 0.67

110) A sales representative calls on five hospitals in Utah County. It is immaterial in what order he
calls on them. How many ways can he organize his calls?
A) 100
B) 120
C) 24
D) 15

111) Which of the following best describes the proportion of times that an event will occur, assuming
that all outcomes in a sample space are equally likely to occur?
A) classical probability
B) relative frequency probability
C) subjective probability
D) joint probability

112) Bayes' Theorem is used to compute:

A) prior probabilities.
B) probabilities of the intersection of two events.
C) probabilities of the union of two events.
D) posterior probabilities.

113) Initial estimates of the probabilities of events are known as:

A) joint probabilities.
B) posterior probabilities.
C) prior probabilities.
D) conditional probabilities.
Course LO: Identify and apply the basic concepts and tools of probability

114) Which of the following would fit the definition of the statistical independence of events A and B?
A) P(A ∣ B) = P(B ∣ A)
B) P(A ∣ B) = P(A) + P(B)
C) P(A ∣ B) = P(B)
D) P(A ∣ B) = P(A)

115) Which of the following best describes the multiplication rule of probabilities?
A) P(A ∣ B) = P(A) P(B)
B) P(A ∣ B) = P(A ∩ B) P(B)
C) P(A ∩ B) = P(A ∣ B) P(B)
D) P(A ∩ B) = P(A ∣ B) P(A)

116) If two events A and B are mutually exclusive, what would be the addition rule?
A) P(A ∪ B) = P(A) + P(B)
B) P(A ∩ B) = P(A) + P(B)
C) P(A | B) = P(A)
D) P(A | B) = P(A) - P(B)

117) There are two letters X and Y. If repetitions such as XX are permitted, how many two-letter
permutations are possible?
A) 2
B) 4
C) 6
D) 8

118) If P(A) = 0.25 and P(B) = 0.60, then P(A ∩ B) is:

A) 0.15
B) 0.35
C) 0.25
D) Cannot be determined from the information given

119) If the events A and B are independent with P(A) = 0.30 and P(B) = 0.40, then the probability that
both events will occur simultaneously is:
A) 0.10
B) 0.12
C) 0.70
D) 0.75

120) Which of the following statements is true given that the events A and B have nonzero
probabilities?
A) A and B cannot be both independent and mutually exclusive.
B) A and B can be both independent and mutually exclusive.
C) A and B are always independent.
D) A and B are always mutually exclusive.

121) If A and B are independent events with P(A) = 0.60 and P(B) = 0.70, then the probability that A
occurs or B occurs or both occur is:
A) 1.30
B) 0.88
C) 0.42
D) 0.10

122) If A and B are independent events with P(A) = 0.20 and P(B) = 0.60, then P(A | B) is:
A) 0.20
B) 0.60
C) 0.40
D) 0.80

123) When a problem arises in counting the numbers of basic outcomes in the sample space and the
event of interest to compute the probability of an event, it is helpful to use:
A) sample spaces or complements.
B) permutations or combinations.
C) unions and intersections.
D) subsets and events.

124) The diagram which provides an intuitive understanding of the addition rule which computes the
probability of the union of events is called a:
A) plot diagram.
B) scattered diagram.
C) Venn diagram.
D) tree diagram.

125) Events whose probability of their intersection is the product of their individual probabilities and
is more than 0 are called:
A) mutually exclusive.
B) complement.
C) conditional.
D) independent.

126) The probabilities that result from studying two distinct sets of events are called:
A) individual probabilities.
B) classic probabilities.
C) bivariate probabilities.
D) problem probabilities.

127) The type of diagram that shows subsets of the population on different branches is called a:
A) departmental diagram.
B) tree diagram.
C) Venn diagram.
D) scattered diagram.
128) The probabilities that may be computed by summing the corresponding row or column of a two-
way table are called:
A) marginal probabilities.
B) bivariate probabilities.
C) individual probabilities.
D) conditional probabilities.

129) To determine the effectiveness of a new advertisement which is shown to one customer group
and not another, followed by observation of the purchase behavior of both groups is determined by
the use of:
A) odds.
B) marginal probabilities.
C) overinvolvement ratios.
D) tree diagrams.

130) The result given by the ratio of the probability of an event divided by the probability of its
complement is called the:
A) odds in favor.
B) return on investment.
C) profit ratio.
D) marginal probabilities.

131) The application which provides a way of revising conditional probabilities by using available
information and provisions for revising conditional probabilities with other information that is useful
for management decision making is called:
A) overinvolvement ratios.
B) Bayes' theorem.
C) empirical formula.
D) probability rules.

132) Which of the following applications would an auditor apply to determine the probability of a
corporation's account balance being in error?
A) Overinvolvement ratios
B) Probability rules
C) Bayes' theorem
D) Empirical formula