- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Probability Concepts
- Subject 10. Principles of Counting
CFA Practice Question
An individual has part of his money tied up in 6 stocks. He decided that each must remain in his portfolio, be sold, or be given to his son. How many possible outcomes does this individual face?
A. 18
B. 64
C. 729
Explanation: The number of possible outcomes is 36 = 729.
User Contributed Comments 5
User | Comment |
---|---|
CocaColas | Can anyone explain this? |
danlan | for each stock, three choices: remain, sold, given, so 3^6 in total |
PedroEdmundo | For each stock you have 3 choices (or Outcomes) thus the number of possible outcomes is:3*3*3*3*3*3 or 3^6 |
Criticull | i got it right, but what is the logic against using 6^3 instead of 3^6? |
schelsea | Each stock can be distributed 3 ways, so 3^6 (3 ways each stock) |