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. 9/50
• B. 7/25
• C. 7/20
• D. 21/50
• E. 27/50

Hint:

When calculating probabilities, make sure to consider all possible categories and avoid double-counting.

Answer 1

The Correct Option is A

Step 1: Total number of people investing in municipal bonds.
35% of 2,500 people invest in municipal bonds: \[ 0.35 \times 2500 = 875 \] Step 2: Total number of people investing in both municipal bonds and oil stocks.
7% of 2,500 people invest in both: \[ 0.07 \times 2500 = 175 \] Step 3: People who invest in municipal bonds but not in oil stocks.
The number of people who invest in municipal bonds but not in oil stocks is: \[ 875 - 175 = 700 \] Step 4: Probability calculation.
The probability is: \[ \frac{700}{2500} = \frac{7}{25} \] \[ \boxed{\frac{9}{50}} \]