Westminster International University in Tashkent

Quantitative Methods 3BUSS001C Academic Year 2023-2024

Seminar 6. Introduction to Probability

Question 1. An investor has two stocks: stock A and stock B. Each stock may increase in value,
decrease in value, or remain unchanged. Consider the experiment of investing in the two stocks and
observing the change (if any) in value.
a) How many outcomes are possible?
b) Show a tree diagram for the experiment.
c) How many of the outcomes result in an increase in value for at least one of the two stocks?
d) How many of the outcomes result in an increase in value for both of the stocks?

Solution:
a) 3 outcomes in the first step * 3 outcomes in the second step = 9 outcomes;
b)

Stock A Stock B Outcomes

Increase II 1
Increase Decrease ID 2
Unchanged IU 3
Increase DI 4
Decrease Decrease DD 5
Unchanged DU 6
Increase UI 7
Unchanged Decrease UD 8
Unchanged UU 9
c) 5 outcomes
d) 1 outcome

Question 2. A man has 7 kinds of shirt, 5 kinds of tie and 3 kinds of suit. How many ways can he
wear them?

Solution:

7*5*3=105; First he has to decide on a pair of shirts and he has 7 different choices. For each of
those choices he has a choice of 5 different ties, so that gives him 5 times 7 = 35 different tie/shirt
combinations. For each those 35 possibilities, he has 3 different suits he could select, so altogether
he has 35 times 3 = 105 different outfits, and some of them may be acceptable to wear in public.

Question 3. Assume this CIFS group has 25 students. How many different ways can two students
be chosen to solve a question by the tutor?

Solution:

Realize that order of selection does not matter. This can be solved by using combination.

n N! 25 ! 25∗24
CN= = = =300
n!∗( N −n ) ! 2! ( 25−2 ) ! 2

Question 4. There are 16 contestants vying for the prize. How many different ways can 1st, 2nd, and
3rd place winners be chosen?
Westminster International University in Tashkent
Quantitative Methods 3BUSS001C Academic Year 2023-2024

Solution:

Order of selection matters here. 1st place is different than 2nd place. We will use permutation.

N! 16 !
P= = =16∗15∗14=3360
( N−n ) ! 13!

Question 5. A bowl contains 10 blue chips and 5 red chips. Two chips are to be drawn successfully
at random and without replacement. Compute the probability that the first draw results in a red chip
and the second draw results in a blue chip.

Solution:

Define the events:

A-first chip is red
B-second chip is blue

Since the chip is not replaced, these events are dependent (the first chip is not replaced and the
outcome of the first chip has influence on the probability of the second).
P(A and B) = P(A)*P(B|A) = 5/15*10/14 = 50/210 = 0.2381 or 23.81%
P(A) = 5/15
P(B|A) = 10/14

Question 6. There are 24 milk packages on the shelf at a grocery store and 5 of them are spoiled. If
a customer buys two milk packages, find the probability
a) That both of them are spoiled
b) That only 1 is spoiled
c) At least 1 is spoiled
Solution:
Define the events:
S1-first package is spoiled
S2-second package is spoiled
N1-first package is not spoiled
N2-second package is not spoiled
Since the package is not replaced, these events are dependent (the first package is not replaced and
the outcome of the first package has influence on the probability of the second).

A) P(Both spoiled)
P(S1 and S2) = P(S1)*P(S2|S1)=5/24*4/23=0.036

B) P(only 1 spoiled). We can have the first one spoiled and the second one not spoiled, or the other
way around.
P(S1,N2|S1) + P(N1, S2|N1) = (5/24)*(19/23) + (19/24)*(5/23) = 0.34

C) P(at least 1 spoiled). The following events satisfy this criteria: First one spoiled second one not
spoiled; First one not spoiled second one spoiled; Both spoiled.
P(S1,S2) + P(S1,N2) + P(N1, S2) = 0.036 + (5/24)*(19/23) + (19/24)*(5/23) = 0.38
Westminster International University in Tashkent
Quantitative Methods 3BUSS001C Academic Year 2023-2024

Question 7. If S = {1, 2, 3, 4, 5, 6, 7, 8, 9, 10}, and Odd = {1, 3, 5, 7, 9}, and Even = {2, 4, 6, 8,
10}, and Prime = {2, 3, 5, 7}. Find:
a) Odd U Even b) Odd ∩ Even c) Odd U Prime d) Odd ∩ Prime
e) Even U Prime f) Even ∩ Prime g) OddC h) EvenC
i) PrimeC j) Even ∩ PrimeC
Solution:
a) {1, 3, 5, 7, 9) U {2, 4, 6, 8, 10} = {1, 2, 3, 4, 5, 6, 7, 8, 9, 10} = S
The full set. Odd and even numbers make up the entire set. There exists no other whole integer.

b) {1, 3, 5, 7, 9} ∩ {2, 4, 6, 8, 10} = Ø

Empty set. No number is odd and even at the same time.

c) {1, 3, 5, 7, 9} U {2, 3, 5, 7} = {1, 2, 3, 5, 7, 9}

Odd numbers and prime numbers.

d) {1, 3, 5, 7, 9} ∩ {2, 3, 5, 7} = {3, 5, 7, 9}

All odd prime integers

e) {2, 4, 6, 8, 10} U {2, 3, 5, 7} = {2, 3, 4, 5, 6, 7, 8, 10}

Even numbers and prime numbers.

f) {2, 4, 6, 8, 10} ∩ {2, 3, 5, 7} = {2}

g) {1, 3, 5, 7, 9}C = {2, 4, 6, 8, 10} = Even

Complement of odd numbers are even numbers.

h) {2, 4, 6, 8, 10}C = {1, 3, 5, 7, 9} = Odd

Complement of even numbers are odd numbers.

i) {2, 3, 5, 7}C = {1, 4, 6, 8, 9, 10}

Complement of prime numbers are non-prime (composite) numbers.

j) {2, 4, 6, 8, 10} ∩ {2, 3, 5, 7}C = {2, 4, 6, 8, 10} ∩ {1, 4, 6, 8, 9, 10} = {4, 6, 8, 10}
Composite even numbers.
Question 8. A class contains 10 men and 20 women of which half the men and half the women
have brown eyes. Find the probability that a person chosen at random is a woman or has brown
eyes.
Solution:
P(Woman U Brown eyes) = P(Woman) + P(Brown eyes) – P(Woman ∩ Brown eyes)
= 20/30 + 15/30 – 10/30 = 25/30

Men Women
Brown eyes 5 10 15
Non-brown eyes 5 10 15
10 20 30
Westminster International University in Tashkent
Quantitative Methods 3BUSS001C Academic Year 2023-2024

Question 9. A radio station asked a random sample of 1000 out of the 250,000 listeners to find out
how many preferred one of four types of music.
Type of music Number of listeners
Pop 521
Big band 188
Classical 207
Other 84
What is the probability that a randomly chosen listener from the sample likes pop music?

Solution:
Probability = the number of ways of achieving success/ total number of possible outcomes

P (Pop music) = 521/1000 = 0.521 or 52.1 %

Question 10. The final exam in Math science resulted in the following grades
Grade A B C D E
№ of students 7 12 16 5 3
a) What is the probability that a randomly selected student received an A?
b) What is the probability that a randomly selected student received a C or lower?

Solution:
a) P (Grade A) = 7/43 = 0.1628 or 16.28%
b) P(Grade C and less) = (16+5+3) / 43 = 24/43 = 0.5581 or 55.81%

Question 11. A die is thrown and a coin is tossed.

a) How many different outcomes are possible?
b) What is the probability of a 3 and a head?

Solution:
a) Die has 6 different outcomes *a coin has 2 outcomes = 6*2= 12 different outcomes
b) P(3&head) = P(3)*P(head) 1/6*1/2 = 1/12 = 0.0833 0r 8.33%

Question 12. In a lottery there are 1000 prizes of $10, 500 prizes of $50 and 100 prizes of $500.
Assuming that 10,000 tickets are to be issued and sold, what is the expected value of the prize?

Solution :
E [ X ] =∑ [$ n∗P ( X n) ]

10*(1,000/10,000) + 50*(500/10,000) + 500*(100/10,000) = $8.5