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## Arithmetic Probability

This topic has 6 member replies
dheaven1 Junior | Next Rank: 30 Posts
Joined
08 Feb 2010
Posted:
10 messages

#### Arithmetic Probability

Thu Feb 18, 2010 11:18 pm
Among a group of 2,500 people, 35 percent invest in
municipal bonds, 18 percent invest in oil stocks, and
7 percent invest in both municipal bonds and oil
stocks. If 1 person is to be randomly selected from
the 2,500 people, what is the probability that the
person selected will be one who invests in municipal
bonds but NOT in oil stocks?

A. 9/50
B. 7/25
C. 7/20
D. 21/50
E. 27/50

I need explanation on why you would factor in the 7 percent invested in both municipal bonds and oil stocks.

garavkaram Newbie | Next Rank: 10 Posts
Joined
16 Nov 2010
Posted:
1 messages
Tue Nov 16, 2010 6:42 am
Hi Experts, help me pls.

here's what I am stuck at:-

1.) person who invested in oil stocks = 18%
1.a) person who NOT invested in oil stocks = (100-18) = 82%
2.) person who invetsed in municipal bond = 35 %

combining 1.a. & 2 we get,
person invested in municipal bond AND NOT in oil stock = 82% * 35 % which is not 7/25.

I am sure I am missing something but dont know what..

regards,

Fractal Master | Next Rank: 500 Posts
Joined
22 Aug 2010
Posted:
183 messages
5
Test Date:
24.09.2011
Target GMAT Score:
700
Sun Jul 31, 2011 9:17 am
ajith wrote:
dheaven1 wrote:
Among a group of 2,500 people, 35 percent invest in
municipal bonds, 18 percent invest in oil stocks, and
7 percent invest in both municipal bonds and oil
stocks. If 1 person is to be randomly selected from
the 2,500 people, what is the probability that the
person selected will be one who invests in municipal
bonds but NOT in oil stocks?

A. 9/50
B. 7/25
C. 7/20
D. 21/50
E. 27/50

I need explanation on why you would factor in the 7 percent invested in both municipal bonds and oil stocks.
35 percent invests in municipal bonds this includes the 7% who invested in both municipal bonds and oil stocks.

So 28 percent invests in municipal bonds but not in oil stocks

Now the probability is 28/100 = 7/25
wow, what an easy way! it takes like 15 seconds to solve the question like this! i didn't recognize that unfortunately and hence draw a double-matrix, which costs me some seconds...

thephoenix Legendary Member
Joined
17 Nov 2009
Posted:
1560 messages
Followed by:
4 members
137
Target GMAT Score:
750
Thu Feb 18, 2010 11:46 pm
dheaven1 wrote:
Among a group of 2,500 people, 35 percent invest in
municipal bonds, 18 percent invest in oil stocks, and
7 percent invest in both municipal bonds and oil
stocks. If 1 person is to be randomly selected from
the 2,500 people, what is the probability that the
person selected will be one who invests in municipal
bonds but NOT in oil stocks?

A. 9/50
B. 7/25
C. 7/20
D. 21/50
E. 27/50

I need explanation on why you would factor in the 7 percent invested in both municipal bonds and oil stocks.
imO b

IF U USE DOUBLE MATRIX SYS OF mgmat

U WILL GET THE NO OF PEPOLE WHO INVEST IN BOND AND NOT OIL STOCK=28*25

PROB=28*25/2500=7/25

ajith Legendary Member
Joined
21 Sep 2006
Posted:
1275 messages
Followed by:
2 members
125
Test Date:
April 2010
Target GMAT Score:
740
Thu Feb 18, 2010 11:49 pm
dheaven1 wrote:
Among a group of 2,500 people, 35 percent invest in
municipal bonds, 18 percent invest in oil stocks, and
7 percent invest in both municipal bonds and oil
stocks. If 1 person is to be randomly selected from
the 2,500 people, what is the probability that the
person selected will be one who invests in municipal
bonds but NOT in oil stocks?

A. 9/50
B. 7/25
C. 7/20
D. 21/50
E. 27/50

I need explanation on why you would factor in the 7 percent invested in both municipal bonds and oil stocks.
35 percent invests in municipal bonds this includes the 7% who invested in both municipal bonds and oil stocks.

So 28 percent invests in municipal bonds but not in oil stocks

Now the probability is 28/100 = 7/25

_________________
Always borrow money from a pessimist, he doesn't expect to be paid back.

harsh.champ Legendary Member
Joined
20 Jul 2009
Posted:
1132 messages
Followed by:
6 members
64
Test Date:
30/03/2012
Target GMAT Score:
780+
GMAT Score:
760
Fri Feb 19, 2010 12:07 am
dheaven1 wrote:
Among a group of 2,500 people, 35 percent invest in
municipal bonds, 18 percent invest in oil stocks, and
7 percent invest in both municipal bonds and oil
stocks. If 1 person is to be randomly selected from
the 2,500 people, what is the probability that the
person selected will be one who invests in municipal
bonds but NOT in oil stocks?

A. 9/50
B. 7/25
C. 7/20
D. 21/50
E. 27/50

I need explanation on why you would factor in the 7 percent invested in both municipal bonds and oil stocks.
Hey dheaven1,
If you are having problems with such type of questions,you should try doing them using Venn-Diagrams.
It will seem very easy when you have the diagram by your side.
In probability,I have found Venn-Diagram to be very useful for advanced problems.
Also,You should consult set theory side by side.

As for the question it can be solved using the equation:-
P(A U B) = P(A) + P(B) - P(A n B) [U-union, n -intersection]

In the question,we have to find P(B) - P(A n B)

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Just because something is hard doesn't mean you shouldn't try,it means you should just try harder.

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shashank.ism Legendary Member
Joined
20 Jul 2009
Posted:
1021 messages
Followed by:
2 members
41
Test Date:
ND
Target GMAT Score:
780
GMAT Score:
NA
Sun Feb 21, 2010 3:34 pm
dheaven1 wrote:
Among a group of 2,500 people, 35 percent invest in
municipal bonds, 18 percent invest in oil stocks, and
7 percent invest in both municipal bonds and oil
stocks. If 1 person is to be randomly selected from
the 2,500 people, what is the probability that the
person selected will be one who invests in municipal
bonds but NOT in oil stocks?

A. 9/50
B. 7/25
C. 7/20
D. 21/50
E. 27/50

I need explanation on why you would factor in the 7 percent invested in both municipal bonds and oil stocks.
%ge \invested in mutual bond = 35 m

person who invetsed in mutual bond = 35 %
person who invested in oil stocks = 18%
person who invested in bopt h = 7%
person who invested in mutual bond and not oil stocks= 35 -7 = 28

so %ge = 28 /100 = 7 /25 Ans B

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