- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Probability Concepts
- Subject 10. Principles of Counting

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**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 3

^{6}= 729.

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**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) |