Answer to Question #126786 in Statistics and Probability for jaya

Question

05) a) Tiger Funds Ltd. operates a number of mutual funds in high technology and in financial
sectors. Hussein Roberts is a fund manager who runs a major fund that includes a wide
variety of technology stocks. As fund manager he decides which stocks should be purchased
for the mutual fund. The compensation plan for fund managers includes a first-year bonus
for each stock purchased by the manager that gains more than 10% in the first six months it
is held. Of those stocks that the company holds, 40% are up in value after being held for two
years. In reviewing the performance of Mr. Roberts, they found that he received a first-year
bonus for 60% of the stocks that he purchased that were up after two years. He also received
a first-year bonus for 40% of the stocks he purchased that were not up after two years.
What is the probability that a stock will be up after two years given that Mr. Roberts received
a first-year bonus?

Answer 1

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