Part a: A VC (venture capitalist) is evaluating some small businesses. Suppose s

Question

Part a: A VC (venture capitalist) is evaluating some small businesses. Suppose she considers a business successful if the monthly gross income exceeds $350,000. She also considers the business to be a somewhat better investment if the owner has a graduate degree or higher. If she were to pick a business at random, and let S be the event that the selected business is successful, and G the event that it the owner has a graduate degree (or higher). According to previous records from her analysts, P(S) = 0.107, P(G) = 0.454, and the probability that a business is both successful, and the owner has a graduate degree is 0.092. What is the probability that the business is either successful or that the owner has a graduate (or higher) degree?

Part b: Where does these numbers come from? Where or how do you think the VC's analyst came up with the probabilities specified in the question?

Explanation / Answer

a) P(S U G) = P(S) + P(G) - P(S and G)

                   = 0.107 + 0.454 - 0.092

                   = 0.469

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects