- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 4. Probability Trees and Conditional Expectations
- Subject 2. Probability Trees and Conditional Expectations
CFA Practice Question
In a certain electric motor factory, production lines 1, 2, and 3 produce 10%, 40%, and 50%, respectively, of the total output. Of their respective outputs, 5%, 3%, and 1% are defective. An electric motor is selected at random. What is the probability that the motor is defective?
B. 0.090
C. 0.978
A. 0.022
B. 0.090
C. 0.978
Correct Answer: A
P(B) = P(B|A1)P(A1) + P(B|A2)P(A2) + P(B|A3)P(A3) = 0.05 x 0.10 + 0.03 x 0.40 + 0.01 x 0.50 = 0.022.
Let Ai denote the event that the motor came from line i, where i = 1, 2, 3, and B denote the event that the motor is defective. Using the total probability rule:
P(B) = P(B|A1)P(A1) + P(B|A2)P(A2) + P(B|A3)P(A3) = 0.05 x 0.10 + 0.03 x 0.40 + 0.01 x 0.50 = 0.022.
User Contributed Comments 3
User | Comment |
---|---|
Amrokken | Straighforward 1 |
ANBobby | Does that add up correctly? |
ANBobby | oops nevermind |