Question

You are a financial analyst facing the task of selecting bond mutual funds to purchase for a client's portfolio. You have narrowed the funds to be selected to fourteen different funds. In order to diversify your client's portfolio, you will recommend the purchase of three different funds. Eight of the funds are short-term corporate bond funds. What is the probability that of the three funds selected, a. exactly 1 is a short-term corporate bond fund? b. at least 1 is a short-term corporate bond fund? c. two are short-term corporate bond funds? d. Another financial analyst narrowed their own funds to be selected to ten different funds. The probability that three of the recommended funds were exactly two of the eight short-term corporate bond funds is 46.67%. How does this compare to the results of c.? a. P(X=1)= % (Round to two decimal places as needed.) b. P(X≥1)= % (Round to two decimal places as needed.) c. P(X=2)= % (Round to two decimal places as needed.)

Answer #1

Number of different funds, N = 14

Purchase Funds, n = 3

Short term funds, S = 8

**a)** Probability that of the three funds
selected exactly 1 is a short-term corporate bond fund =

**b)** Probability that of the three funds
selected at least 1 is a short-term corporate bond fund =

**c)** Probability that of the three funds
selected two are short-term corporate bond funds

**d)** The probability of the another financial
analyst was more than your financial analyst.

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