Question

Alison has all her money invested in two mutual funds, a and
b. she knows that there is a 40% chance that fund a will rise in price. there is a 60% chance that fund b will rise in price given that fund a rises in price. there is also a 30% chance that fund b will rise in price. what is the probability that at least one of the funds will rise in price?

Answer 1

Probablity that A will raise p(A) = 40% = 0.4 Probablity that B raises with A p(A|B)= 60% = 0.6 Probablity that B will raise p(B) = 30% = 0.3 Probablity that both a and b raises P(A and B) = p(A) x p(A|B) 0.4 x 0.6 = 0.24 Probability that at least one of funds will rise p(a or b) = p(A) + p(B) - P(A and B) = 0.4 + 0.3 - 0.24 = 0.7- 0.24 = 0.46 Probability that at least one of funds will rise = 0.46

Answer 2

0.46 is the probability that at least one of the funds will rise in price.

Further Explanation:

Step 1:

Probability of rising in the price of fund A:

P(A) = 40% = 0.4

Step 2:

The probability that the price of fund Braises with fund A:

P(A/B) = 60% = 0.6

Step 3:

Probability of rise in price of fund B:

P(B) = 30% = 0.3

Step 4:

The probability that both the funds A and B will rise in price:

P(A and B) = P(A) × P(A/B)

= 0.4 × 0.6

= 0.24

Step 5:

The probability that at least one of the funds will rise in price:

P (A or B) = P (A) + P (B) – P (A and B)

= 0.4 + 0.3 – 0.24

= 0.46

Therefore, 0.46 is the probability that at least one of the funds will rise in price.

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Answer Details:

Grade: High school

Chapter: Probability

Subject: Statistics

Keywords: Alison has all her money invested in two mutual funds, A and

B,She knows that there is a 40% chance that fund a will rise in price, there is a 60% chance that fund b will increase in price given that fund arises in price, there is also a 30% chance that fund b will rise in price, what is the probability that at least one of the funds will increase in price.