The probability that stocks ABC and DEF both increase in price

during the next month is 1/6; the probability that ABC increases

in price but DEF does not is 2/9; and the probability that DEF

increases in price but ABC does not is 1/3.

(a) What is the probability that neither ABC nor DEF increases in

(b) Are "ABC increases in price" and "DEF increases in price"

price during the next month?

independent events? Why or why not?

Guest Feb 18, 2015

#1**+5 **

the corrected diagram is on a post below.

Prob that neither increase is 5/18

They are very unlikely to be independent events because the market tends to be either up or down over any given period of time, pluys if one company is going broke then its competitor might be doing really well.

However if the companies are not in the same sector (similar field) or in the same country they would be more independent than otherwise.

Melody
Feb 18, 2015

#2**+5 **

The answer by Melody has an error: the circle DEF should be 1/3, not 1/2. 1/3 = 6/18, changing the probability to 5/18.

I am smarter than Melody. Learn to read directions properly.

Guest Feb 18, 2015

#3**+5 **

Thanks anon for picking my error up.

I would estimate that half the people on this planet are smarter than me so I think it highly likely that you are one of them :)

I just have a passion for mathematics and I want to pass that passion onto other people wherever it is possible.

If I cannot help someone to love mathematics perhaps I can at least help them to be less intimidated by it.

Here is the corrected Venn diagram. :)

Melody
Feb 18, 2015

#4**+5 **

Nice Venn diagram, Melody....!!!!

BTW.....here's a site that will generate a Venn diagram "automatically." {Well...more or less}

http://www.softschools.com/math/venn_diagram/venn_diagram_maker/

CPhill
Feb 18, 2015

#6**0 **

Just hold down the mouse and "drag" the circles into the presentation area.....text can be added, too...!!

This is a womderul tool....!!!

CPhill
Feb 18, 2015