Question

In: Statistics and Probability

Acme Materials is a publicly traded company on the NYSE. On October 15, 2021, at 10:46am,...

Acme Materials is a publicly traded company on the NYSE. On October 15, 2021, at 10:46am, company ACME materials, has traded between the price range of $2400 and $2300. Where, $2400 is the high of the range and $2300 is the low of the range.

Fact: As of 10:46am,

- There is a 75% probability that either $2400 will be thehighest price of the day

or

$2300 will be the lowest price of the day.

(Meaning there is a 25% probability that neither 2400 or 2300 will be the high or low of the day.)
Probability of both events occuring together is not provided

Question 1: What is the probability that $2400 is the highest price of the day?

Question 2: Please list / define, what statistical principles and or formula’s make this answer true? How do I get to understandthis answer?

Question 3: I have basic high school math skills, what resourcescan I use to further my understanding of the underlying principles to this solution?

Solutions

Expert Solution

First of all there is nothing to worry regarding the understanding of the question. It is a very simple problem on set theory.

See carefully.

Let A be the event that $2400 is the highest price of the day and B be the event that $2300 is the lowest price of the day.

Now it is given that, there is a 75% probability that either $2400 will be the highest price of the day or $2300 will be the lowest price of the day.

That means   

there is a 25% probability that neither 2400 nor 2300 will be the high or low price of the day. It implies

Probability of both events occurring together is not provided means is not provided.

Now

Question 1. what is the value of . But it is not possible to get value of Pr(A) from the given information.

So the question is incomplete.

By the way,

for understanding probability questions better you can follow any book on statistics and probability.

You can follow (chapter 2 of )

Probability & Statistics
for Engineers & Scientists by

Ronald E. Walpole
Roanoke College
Raymond H. Myers
Virginia Tech
Sharon L. Myers
Radford University
Keying Ye
University of Texas at San Antonio

Thank you.

orchestra answered 2 years ago
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