Probability Problems
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1) A very rich investor has a small amount of spare cash which she wishes to invest. She has four options to choose from. She thinks company 1 has a 43% chance of giving her a return of $327, otherwise she believes it will lose her $296. She thinks company 2 has a 81% chance of giving her a return of $228, otherwise she believes it will lose her $1043. She thinks company 3 has a 46% chance of giving her a return of $181, otherwise she believes it will lose her $187. She thinks company 4 has a 33% chance of giving her a return of $705, otherwise she believes it will lose her $205. Based on these opinions, which company should she invest in?
2) In a certain mining town there are 3 times as many men as women. 64% of the men and 28% of the women attend the weekly football match. During half time a ticket is selected and the holder of that ticket is selected to win a prize. What is the probability that the holder of the winning ticket is a woman?
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The solution provides a detailed and step-by-step explanation (incl. Excel calculations) for the problem.
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1) Need to use the formula for calculating expected return:
EXPECTED RETURN = POTENTIAL RETURN* PROBABILITY OF ...
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