15. The probability that a recently offered stock by a technology company will double in
value within the next three months is 90%. The conclusion regarding this probability
estimate was reached based on the opinion of the experts in the technology field to
which this stock belongs and also on the belief of the experts. Estimating probability in
this way is an example of
(a) subjective probability.
(b) classical probability.
(c) joint probability.
(d) marginal probability.
16. The three main counting rules useful in determining probabilities are:
(a) permutations, combinations, and sample points.
(b) k‐step experiment, decision trees, and permutations.
(c) permutations, combinations, and k‐step experiments.
(d) permutations, combinations, and experimental outcomes.
a
b
15. The method described in the scenario for estimating the probability of a stock doubling in value is an example of subjective probability. This is because it is based on the opinions and beliefs of experts in the technology field, rather than being determined through a formal mathematical or statistical analysis.
To arrive at the answer, consider the following steps:
1. Read the given information about the probability estimate for the stock doubling in value.
2. Understand that this estimate is based on the opinions and beliefs of experts in the technology field.
3. Recognize that subjective probability refers to probability estimates based on personal judgments, opinions, or beliefs rather than formal mathematical calculations or empirical data.
4. Select option (a) subjective probability as the correct answer.
16. The three main counting rules useful in determining probabilities are permutations, combinations, and sample points.
To solve this question, follow these steps:
1. Understand that counting rules are methods used to determine probabilities in various situations.
2. Review the answer choices and identify which ones are related to counting rules.
3. Assess each answer choice to determine if it includes the three main counting rules (permutations, combinations, and sample points).
4. Eliminate answer choices that do not include all three counting rules.
5. Select option (a) permutations, combinations, and sample points as the correct answer.