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GMAT Practice Question- What is the Probability of Investing?

Discussion in 'CAT/MAT/GMAT Preparation' started by Royaluni, Sep 10, 2015.

  1. Royaluni

    Royaluni Administrator

    Qt. Among a group of 2500 people, 35 % invest in municipal bonds, 18% invest in oil stocks, and 7% invest in both municipal bonds & oil stocks. If 1 person is to be randomly selected from the 2500 people, what is the probability that the person selected will be the 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

    Answer- from the question itself, it is clear that it is a probability question where individual groups are expressed in percentage, so we first need to calculate actual number of people in each group and then we need to use those numbers to find out the probability;

    There are total 2500 people, out of which;

    35 % invest in municipal bonds, 2500 * 0.35 = 875

    7% invest in both, municipal bonds as well as oil stocks, 2500 * 0.07 = 175

    Which means, people investing in municipal bonds but not oil stocks, 875-175 = 700

    Probability is expressed as = number of desired outcome / total number of outcome

    Our question is asking probability of finding person who is investing in municipal bonds but not in oil stocks;

    Probability = 700 / 2500 = 7/25

    Answer Choice, B.

    Please try it yourself to understand it better.

    Learn Sequence-What is the value of A6?

    Source- Official GMAT 2016 Guide
    Last edited: Sep 11, 2015

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