Question 1

An investment consultant is recommending a certain class of mutual funds to the
clienteles based on its exceptionally high probability of gain. It is an ethical practice to explain to
the clienteles what the basis of her probability estimate is.

Accepted Answer

It is an ethical practice to explain to clients the basis of probability estimates for any investment recommendation made by the consultant. This helps the client make informed decisions and avoid any misunderstandings or misrepresentations.

Question 2

SCENARIO 4-12
A consulting firm that surveyed consumers' holiday shopping behavior found that the percentage of
consumers from the U.S., Canada, and China who said that they planned to spend more on holiday
shopping were 40%, 34% and 73%, respectively. The survey also found that the percentage of
consumers from the U.S., Canada, and China who said that they were willing to share personal
information with retailers in order to receive personalized offers from retailers were 55%, 46% and
72%, respectively. Assume that there are equal portions of consumers being surveyed from each of
the three countries, the survey results are good representations of the three populations of consumers,
and whether a consumer plans to spend more on holiday shopping is statistically independent of
whether he/she is willing to share personal information with retailers in order to receive personalized
offers from retailers.
-Referring to Scenario 4-12, if you randomly select a consumer from Canada, what is the
probability that the consumer plans to spend more on holiday shopping and is willing to share
personal information with retailers in order to receive personalized offers from retailers?

Accepted Answer

The answer of SCENARIO 4-12
A consulting firm that surveyed consumers'...

Question 3

An investment consultant is recommending a certain class of mutual funds to the
clienteles based on its exceptionally high probability of exceptionally high gain. It is an unethical
practice to tell the clienteles the probability of a loss in her recommendations.

Accepted Answer

It is ethical and necessary for an investment consultant to disclose all relevant information, including the probability of a loss, to ensure that clients can make informed decisions.

Question 4

You know that the probability of a randomly selected student will cheat on an exam is 1%. You also know that the probability of a randomly selected student will cheat on an exam knowing that
His/her fellow classmate is cheating on the exam is also 1%. Which of the following is true about
The event of "the randomly selected student cheating on an exam" and "his/her classmate is
Cheating on the exam"?
A) They are mutually exclusive.
B) They are collectively exhaustive.
C) They are independent.
D) None of the above.

Accepted Answer

The probability of a student cheating is the same regardless of whether their classmate is cheating, indicating that the events are independent.

Question 5

SCENARIO 4-12
A consulting firm that surveyed consumers' holiday shopping behavior found that the percentage of
consumers from the U.S., Canada, and China who said that they planned to spend more on holiday
shopping were 40%, 34% and 73%, respectively. The survey also found that the percentage of
consumers from the U.S., Canada, and China who said that they were willing to share personal
information with retailers in order to receive personalized offers from retailers were 55%, 46% and
72%, respectively. Assume that there are equal portions of consumers being surveyed from each of
the three countries, the survey results are good representations of the three populations of consumers,
and whether a consumer plans to spend more on holiday shopping is statistically independent of
whether he/she is willing to share personal information with retailers in order to receive personalized
offers from retailers.
-Referring to Scenario 4-12, if you randomly select a consumer from the U.S., what is the
probability that the consumer plans to spend more on holiday shopping and is not willing to share
personal information with retailers in order to receive personalized offers from retailers?

Accepted Answer

The answer of SCENARIO 4-12
A consulting firm that surveyed consumers'...

Question 6

An investment consultant is recommending a certain class of mutual funds to the
clienteles based on its exceptionally high probability of gain. It is an unethical practice not to
also recommend a class of mutual funds with an exceptionally high probability of loss.

Accepted Answer

Recommending investments based on their potential for gain is a standard practice, and it is not unethical to omit recommendations for investments with a high probability of loss. The consultant's duty is to act in the best interest of their clients, which includes recommending investments that align with the clients' goals and risk tolerance, not necessarily presenting options with high risk of loss.

Question 7

An investment consultant is recommending a certain class of mutual funds to the
clienteles based on its exceptionally high probability of gain. It is an ethical practice to explain to
the clienteles what the meaning of probability is.

Accepted Answer

It is ethical to explain the meaning of probability to clients before recommending a mutual fund based on its probability of gain. This helps clients make informed investment decisions and understand the level of risk involved.

Question 8

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, if an adult is selected at random, what is the probability that he/she
is a registered voter?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 9

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, is the preferred source of current information independent of the
voting registration status?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 10

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, if an adult is selected at random, what is the probability that he/she
is a registered voter who prefers to get his/her current information from the television?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 11

SCENARIO 4-12
A consulting firm that surveyed consumers' holiday shopping behavior found that the percentage of
consumers from the U.S., Canada, and China who said that they planned to spend more on holiday
shopping were 40%, 34% and 73%, respectively. The survey also found that the percentage of
consumers from the U.S., Canada, and China who said that they were willing to share personal
information with retailers in order to receive personalized offers from retailers were 55%, 46% and
72%, respectively. Assume that there are equal portions of consumers being surveyed from each of
the three countries, the survey results are good representations of the three populations of consumers,
and whether a consumer plans to spend more on holiday shopping is statistically independent of
whether he/she is willing to share personal information with retailers in order to receive personalized
offers from retailers.
-Referring to Scenario 4-12, if you randomly select a consumer from China, what is the
probability that the consumer plans to spend more on holiday shopping and is willing to share
personal information with retailers in order to receive personalized offers from retailers?

Accepted Answer

The answer of SCENARIO 4-12
A consulting firm that surveyed consumers'...

Question 12

SCENARIO 4-12
A consulting firm that surveyed consumers' holiday shopping behavior found that the percentage of
consumers from the U.S., Canada, and China who said that they planned to spend more on holiday
shopping were 40%, 34% and 73%, respectively. The survey also found that the percentage of
consumers from the U.S., Canada, and China who said that they were willing to share personal
information with retailers in order to receive personalized offers from retailers were 55%, 46% and
72%, respectively. Assume that there are equal portions of consumers being surveyed from each of
the three countries, the survey results are good representations of the three populations of consumers,
and whether a consumer plans to spend more on holiday shopping is statistically independent of
whether he/she is willing to share personal information with retailers in order to receive personalized
offers from retailers.
-Referring to Scenario 4-12, if you randomly select a consumer from Canada, what is the
probability that the consumer plans to spend more on holiday shopping and is not willing to share
personal information with retailers in order to receive personalized offers from retailers?

Accepted Answer

The answer of SCENARIO 4-12
A consulting firm that surveyed consumers'...

Question 13

SCENARIO 4-12
A consulting firm that surveyed consumers' holiday shopping behavior found that the percentage of
consumers from the U.S., Canada, and China who said that they planned to spend more on holiday
shopping were 40%, 34% and 73%, respectively. The survey also found that the percentage of
consumers from the U.S., Canada, and China who said that they were willing to share personal
information with retailers in order to receive personalized offers from retailers were 55%, 46% and
72%, respectively. Assume that there are equal portions of consumers being surveyed from each of
the three countries, the survey results are good representations of the three populations of consumers,
and whether a consumer plans to spend more on holiday shopping is statistically independent of
whether he/she is willing to share personal information with retailers in order to receive personalized
offers from retailers.
-Referring to Scenario 4-12, if you randomly select a consumer from the U.S., what is the
probability that the consumer plans to spend more on holiday shopping and is willing to share
personal information with retailers in order to receive personalized offers from retailers?

Accepted Answer

The answer of SCENARIO 4-12
A consulting firm that surveyed consumers'...

Question 14

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, if an adult is selected at random, what is the probability that he/she
is a not a registered voter or does not prefer to get his/her current information from the internet?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 15

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, if a randomly selected adult is a registered voter, what is the
probability that he/she prefers to get his/her current information from the newspapers?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 16

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, if an adult is selected at random, what is the probability that he/she
is a registered voter who does not prefer to get his/her current information from the internet?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 17

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, if an adult is selected at random, what is the probability that he/she
is a registered voter or prefers to get his/her current information from radio?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 18

To ethically advertise a school lottery scheme to try to raise money for the
athletic department, the organizer of the lottery does not need to explicitly specify the probability
of each of the prize in the lottery.

Accepted Answer

It is important to disclose the probability of each prize in the lottery to ensure transparency and honesty in advertising. Failure to do so can be considered misleading and unethical.

Question 19

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, what is the probability that an adult who prefers to get his/her
current information from the internet will be a registered voter?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Question 20

SCENARIO 4-11
A sample of 300 adults is selected. The contingency table below shows their registration status and
their preferred source of information on current events. 
-Referring to Scenario 4-11, if an adult is selected at random, what is the probability that he/she
prefers to get his/her current information from the internet?

Accepted Answer

The answer of SCENARIO 4-11
A sample of 300 adults is...

Quiz 4: Basic Probability

An investment consultant is recommending a certain class of mutual funds to the clienteles based on its exceptionally high probability of gain. It is an ethical practice to explain to the clienteles what the basis of her probability estimate is.

An investment consultant is recommending a certain class of mutual funds to the clienteles based on its exceptionally high probability of exceptionally high gain. It is an unethical practice to tell the clienteles the probability of a loss in her recommendations.

An investment consultant is recommending a certain class of mutual funds to the clienteles based on its exceptionally high probability of gain. It is an unethical practice not to also recommend a class of mutual funds with an exceptionally high probability of loss.

An investment consultant is recommending a certain class of mutual funds to the clienteles based on its exceptionally high probability of gain. It is an ethical practice to explain to the clienteles what the meaning of probability is.

SCENARIO 4-11 A sample of 300 adults is selected. The contingency table below shows their registration status and their preferred source of information on current events. -Referring to Scenario 4-11, if an adult is selected at random, what is the probability that he/she is a registered voter?

SCENARIO 4-11 A sample of 300 adults is selected. The contingency table below shows their registration status and their preferred source of information on current events. -Referring to Scenario 4-11, is the preferred source of current information independent of the voting registration status?

To ethically advertise a school lottery scheme to try to raise money for the athletic department, the organizer of the lottery does not need to explicitly specify the probability of each of the prize in the lottery.