Doubt for Quant Question

bhavyamital
Posts: 6
Joined: Tue Dec 18, 2012 10:57 pm

Doubt for Quant Question

Postby bhavyamital » Wed Dec 19, 2012 10:16 pm

1)In a given portfolio, half of the stocks have a beta greater than one. Of those with a beta greater than one, a third are in a computer-related business. What is the probability of a randomly drawn stock from the portfolio having both a beta greater than one and being in a computer-related business?

2)The events Y and Z are mutually exclusive and exhaustive: P(Y) = 0.4 and P(Z) = 0.6. If the probability of X given Y is 0.9, and the probability of X given Z is 0.1, what is the unconditional probability of X?

Can somebody plz explain me the answer for above 2 ques?

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content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Doubt for Quant Question

Postby content.pristine » Tue Jan 29, 2013 3:54 pm

1. Use the multiplication rule here P(A^B)=P(A)*P(B) = 0.5*1/3 = 1/6 = 0.167%

2. P(X) = P(X/Y)*P(Y) + P(X/Z)*P(Z) = 40%*90% + 60%*10% = 42%


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