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Question

Among a group of 2,500 people, 35 percent invest in municipal bonds, 18 percent invest in oil stocks, and 7 percent invest in both municipal bonds and oil stocks. If 1 person is to be randomly selected from the 2,500 people, what is the probability that the person selected will be one who invests in municipal bonds but NOT in oil stocks?

A
950
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B
725
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C
720
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D
2150
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E
2750
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Solution

The correct option is B 725
Since there are 2,500 people, 2,500(0.35)=875 people invest in municipal bonds, and 2,500(0.07)=175 of those people invest in both municipal bonds and oil stocks. Therefore, there are 875175=700 people who invest in municipal bonds but not in oil stocks. Probability of an event =Number of desired outcomesTotal number of outcomes that can occur
Probability of investing in municipal bonds but not in oil stocks =7002,500=725.
The correct answer is B.

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