so then you apply the same principles to the stock/bond question,
For stocks:
total combinations-->
P41 * P31
(1/12) is the Probability that the analyst predicts the stocks correctly, in order.
For bonds
Total combinations -->
P61 * P51 = 30
(1/30) probability that analyst...
Okay, going back to this example:
To find the probability of picking the first two in correct order:
P31
Because you have 3 choices, and you're picking the 1st one
And to pick the second, you are left with only 2 choices from the 3, so picking one out of that, you have the combination of
P21...
Okay, I see what you mean, that definitely makes more sense than whatever I was trying to do.
So similarly, the probability of the analyst predicting the right bond would be
1/ P62 , since he can only predict one pair and only one pair will be the right one, thus, P(predict bonds...
Thanks betel.
Following up with what you said, I tried again, only this time calculating the probability that the analyst predicts none correctly. So, I used a permutation:
(I don't know how to write down a permutation in this forum, but imagine for now that the subscript and superscript...
Homework Statement
An analyst is presented with lists of four stocks and six bonds. He is asked to predict, in order, the two stocks that will yield the highest return over the next year and the two bonds that will have the highest return over the next year. Suppose that these predictions...