A recent survey reported in Business Week dealt with the salaries of CEOs at large corporations and whether company shareholders made money or lost money.
CEO Paid More CEO Paid Less
Than $1 Million Than $1 Million Total
Shareholders made money 2 11 13
Shareholders lost money 4 3 7
Total l 6 14 20
If a company is randomly selected from the list of 20 studied, what is the probability?
a. the CEO made more than $1 million?
b. the CEO made more than $1 million or the shareholders lost money?
c. the CEO made more than $1 million given the shareholders lost money?
d. of selecting 2 CEOs and finding they both made more than $1 million?
The solution provides step by step method for the calculation of probabilities and conditional probabilities. Formula for the calculation and Interpretations of the results are also included.