Question

A is an investment consultant advices that the odd against the sensex hitting all time high on budget day are $2:1$ and the odd in favour of the sensex remaining sideways are $1:3$. Find the probability of sensex sliding down on budget day.

• A. $\frac{3}{4}$
• B. $\frac{1}{4}$
• C. $\frac{7}{12}$
• D. $\frac{5}{12}$

Answer 1

The correct option is D $\frac{5}{12}$

Probability of odd against the sensex hitting $=2:1$

$\Rightarrow$ Probability of odd favour of the sensex $=1:3$

Probability of sensex sliding down $=\frac{1}{2}$ i.e, $\left(\frac{1}{4\times 3}\right)$

Expectation $=(\frac{1}{3}+\frac{3}{4})-(\frac{2}{3}+\frac{1}{4})+\frac{1}{12}$

$=\frac{13}{12}-\frac{9}{12}+\frac{1}{12}$

$=\frac{5}{12}.$

Hence, the answer is $\frac{5}{12}.$