CFA Practice Question

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CFA Practice Question

Sal has a 60% probability of being Salesman of the Month. He has a 40% probability of getting a raise. Sal has a 10% probability of being Salesman of the Month and getting a raise. What is P(Sal gets raise given he gets Salesman of the Month)?

A. 16.7% to nearest 0.1%
B. 50%
C. 40%
Correct Answer: A

In a similar tree diagram, the event raise given Salesman of Month is represented by the top branch of the second set of branches. To find the probability of this branch we use: 0.6x = 0.1. Now, x = 0.1/0.6 = 1/6 = 0.1666. Thus, P(Sal gets raise given he gets Salesman of the Month) = 16.7% to nearest 0.1%.

User Contributed Comments 5

User Comment
Guenter Figure does not fit to text
fedha P(S) = 0.60 P(R) = 0.40 P(SR) = 0.10 P(R|S) =?
Therefore 0.10 = y*0.60 Solving for y = 0.10/0.60 = 0.1667
P(R|S) = 0.1667
Rachelle3 it is easier to follow q? what is the prob of sal getting a raise now stop here
we know sal getting a raise is 0.4
then it tells you given he gets salesman of month we know its 0.6
so 0.4 divided by 0.6
q? it 1st wants to know prob of raise; given tells you what to divide by
Rachelle3 I made a mistake I meant salesman of month getting raise divided by salesman of month I misread it!
Rachelle3 I was doing it from the other way around the 1st time I could have just added 1 but whichever work best for you!
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