Question

A recent survey reported in BusinessWeek dealt with the salaries of CEOs at large corporations and whether company shareholders made money or lost money.

CEO Paid
More Than
$1 Million CEO Paid
Less Than
$1 Million Total
Shareholders made money 1 13 14
Shareholders lost money 6 3 9

Total 7 16 23


If a company is randomly selected from the list of 23 studied, calculate the probabilities for the following :

(a) The CEO made more than $1 million. (Round your answer to 2 decimal places.)

Probability

(b)

The CEO made more than $1 million or the shareholders lost money. (Round your answer to 2 decimal places.)

Probability

(c)

The CEO made more than $1 million given the shareholders lost money. (Round your answer to 4 decimal places.)

Probability

(d)

Select two CEOs and find that they both made more than $1 million. (Round your answer to 4 decimal places.)

Probability

Answer 1

(a)	The CEO made more than $1 million. (Round your answer to 2 decimal places.)

  Probability = $\frac{7}{23}$ = 0.3043

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b)	The CEO made more than $1 million or the shareholders lost money. (Round your answer to 2 decimal places.)

Probability = 7+9-6/23 = $\frac{10}{23}$

= 0.4348

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Probability

(c)	The CEO made more than $1 million given the shareholders lost money. (Round your answer to 4 decimal places.)

Probability

= $\frac{6}{23} divided by \frac{9}{23}$ = $\frac{6}{9} =\frac{2}{3}$ = 0.6667 --------------------------------------------------------

Probability

(d)	Select two CEOs and find that they both made more than $1 million. (Round your answer to 4 decimal places.) We have to find probability that 2 ceos made more than 1 million. p =7/23 and q=16/23.

Probability = 7C2 (7/23)^2 (16/23)^5   = 0.3169

Answer 2

The CEO made more than $1 million = 7/23

The CEO made more than $1 million or the shareholders lost money. =6/7

The CEO made more than $1 million given the shareholders lost money. = 6/7 (9/23) =33.54%

Select two CEOs and find that they both made more than $1 million. = (7/23)² =.0926 0r 9.26%.