Explore BrainMass

Explore BrainMass

    Random Investor and Security Ownership

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    It is estimated 30% of all adults in United States invest in stocks and that 83% of U.S. adults have investments in fixed income instruments (savings accounts, bonds, etc.). It is also estimated that 25% of U.S. adults have investments in both stocks and fixed income instruments.

    (a) What is the probability that a randomly chosen U.S. adult invests in stocks, given that s/he invests in fixed income instruments?

    (b) What is the probability that a randomly chosen stock investor also invests in fixed income instruments?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:49 pm ad1c9bdddf
    https://brainmass.com/statistics/probability/random-investor-security-ownership-300788

    Solution Preview

    Recall that to calculate conditional probability, we simply need to use ...

    Solution Summary

    The full solution includes details on how to apply Bayes Law to solve these problems.

    $2.19

    ADVERTISEMENT