Lux Investing

It is estimated 29% of all adults in United States invest in stocks and that 87%?

It is estimated 29% of all adults in United States invest in stocks and that 87% of U.S. adults have investments in fixed income instruments (savings accounts, bonds, etc.). It is also estimated that 25% of U.S. adults have investments in both stocks and fixed income instruments. (a) What is the probability that a randomly chosen stock investor also invests in fixed income instruments? Round your answer to 2 decimal places. (b) What is the probability that a randomly chosen U.S. adult invests in stocks, given that s/he invests in fixed income instruments? Round your answer to 2 decimal places.

Public Comments

1. lets say there are 100 people in the sample, 29 invests in stocks, 87 invests in fixed, 25 invests in both. So this means that 4 invests only in stocks, 25 invests in both, 62 invests only in fixed income. (a) So if you picked one guy out of 100, the chance that he invests in both is 0.25 (b) Given that the person invests in fixed income narrows the sample size to 87. There are 25 out of this 87 who invests in both. So the probability that you pick one guy who invests in both is 25/87 (0.29)