MBA

Topic: Probability
Question 1
A marketing research firm is interested in measuring the effectiveness of an advertisement
for a new product. They take a random sample of 500 people and ask them whether they
have bought the new product and whether they saw an advertisement for the product
before the purchase. The results are given in the table:


Saw advertisement Did not see
advertisement
Total
Purchased product 175 45 220
Did not purchase 100 180 280
Total 275 225 500

The marketing research firm is interested in finding out whether seeing the advertisement
(B) affects the probability that a person will buy the product (A). They decide to find P(A)
and the P(A|B)



Question 2
A survey of executives dealt with their loyalty to the company. One of the question was, "if
you were given an offer by another company equal to or slightly better than your current
position, would you remain with the company?" . The responses of the 200 executives in
the survey were cross-classified (contingency table) with their length of service with
company.

Loyalty < 1 year 1-5 year 6-10 year > 10 year Total
Would Remain 10 30 5 75 120
Would not remain 25 15 10 30 80
200

What is the probability of randomly selecting an executive who is loyal to the company
(would remain) and who has more than 10 years of service? P(AnB)