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 for an investment consultant to disclose the basis of their probability estimates to their clients in order to provide transparency and help clients make informed decisions.

Question 2

TABLE 4-9
A survey conducted by the Segal Company of New York found that in a sample of 189 large companies, 40 offered stock options to their board members as part of their non-cash compensation packages. For small- to mid-sized companies, 43 of the 180 surveyed indicated that they offer stock options as part of their noncash compensation packages to their board members.
-Referring to Table 4-9, is the size of the company independent of whether stock options are offered to their board members and why?

Accepted Answer

The answer of TABLE 4-9
A survey conducted by the Segal...

Question 3

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, when a randomly selected worker was not white, what is the probability that the worker had not claimed bias?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

Question 4

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, what is the probability that a randomly selected worker is white and had claimed bias?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

Question 5

TABLE 4-9
A survey conducted by the Segal Company of New York found that in a sample of 189 large companies, 40 offered stock options to their board members as part of their non-cash compensation packages. For small- to mid-sized companies, 43 of the 180 surveyed indicated that they offer stock options as part of their noncash compensation packages to their board members.
-Referring to Table 4-9, if a company is selected at random, what is the probability that the company is small to mid-sized or offered stock options to their board members?

Accepted Answer

The answer of TABLE 4-9
A survey conducted by the Segal...

Question 6

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, what is the probability that a randomly selected worker had not claimed bias?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

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 an ethical practice to ensure that clients have a clear understanding of the terminology used when making investment recommendations. Explaining the meaning of probability in this context would be important for the clients to fully understand the potential risks and rewards of investing in the recommended mutual funds.

Question 8

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

Ethical advertising should be transparent and honest. By not specifying the probability of each prize, the school is not being transparent to those who are considering purchasing a lottery ticket. Providing this information would allow individuals to make an informed decision about their purchase and eliminate any potential misunderstandings or distrust.

Question 9

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"?

Accepted Answer

The events "the randomly selected student cheating on an exam" and "his/her classmate is cheating on the exam" are independent because the probability of one event happening does not depend on the other event happening. The fact that the probability of a randomly selected student cheating on an exam knowing that his/her fellow classmate is cheating on the exam is the same as the general probability of a student cheating indicates that the events are independent. None of the other options (mutually exclusive or collectively exhaustive) apply because they require a different type of relationship between events.

Question 10

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, if a randomly selected worker had claimed bias, what is the probability that the worker is white?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

Question 11

TABLE 4-9
A survey conducted by the Segal Company of New York found that in a sample of 189 large companies, 40 offered stock options to their board members as part of their non-cash compensation packages. For small- to mid-sized companies, 43 of the 180 surveyed indicated that they offer stock options as part of their noncash compensation packages to their board members.
-Referring to Table 4-9, if a randomly selected company offered stock options to their board members, what is the probability that it is a large company?

Accepted Answer

The answer of TABLE 4-9
A survey conducted by the Segal...

Question 12

TABLE 4-9
A survey conducted by the Segal Company of New York found that in a sample of 189 large companies, 40 offered stock options to their board members as part of their non-cash compensation packages. For small- to mid-sized companies, 43 of the 180 surveyed indicated that they offer stock options as part of their noncash compensation packages to their board members.
-Referring to Table 4-9, if a randomly selected company is a large company, what is the probability that it offered stock options to their board members?

Accepted Answer

The answer of TABLE 4-9
A survey conducted by the Segal...

Question 13

TABLE 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 Table 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 TABLE 4-11
A sample of 300 adults is...

Question 14

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, what is the probability that a randomly selected worker is not black and had not claimed bias?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

Question 15

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, what is the probability that a randomly selected worker is black and had not claimed bias or is white and has claimed bias?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

Question 16

TABLE 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 Table 4-11, if an adult is selected at random, what is the probability that he/she prefer to get his/her current information from the Internet?

Accepted Answer

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

Question 17

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, what is the probability that a randomly selected worker is black and had not claimed bias?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

Question 18

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 19

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

It is not an unethical practice to only recommend a class of mutual funds with a high probability of gain. The consultant's duty is to provide accurate and relevant information to the client, not to balance out gains and losses. However, it may be more comprehensive and responsible to inform clients of the risks associated with investing in any mutual fund and encourage them to diversify their portfolio.

Question 20

TABLE 4-10
Are whites more likely to claim bias? It was found that 60% of the workers were white, 30% were black and 10% are other races. Given that a worker was white, the probability that the worker had claimed bias was 30%. Given that a worker was black, the probability that the worker had claimed bias was 40%. Given that a worker was other race, the probability that the worker had claimed bias was 0%.
-Referring to Table 4-10, if a randomly selected worker had not claimed bias, what is the probability that the worker is white?

Accepted Answer

The answer of TABLE 4-10
Are whites more likely to claim...

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 gain. It is an ethical practice to explain to the clienteles what the meaning of probability is.

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.

TABLE 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 Table 4-11, if an adult is selected at random, what is the probability that he/she is a registered voter?

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.