5. A market analyst determines 61.3% of mid-cap funds available to be added to his client's portfolio outperformed their S&P benchmarks over the past 3 years. (a) When choosing funds at random, what is the likelihood the first fund to outperform its benchmark happens in less than six tries? (b) What is the likelihood in a random group if 12 funds, at least eight outperform their benchmarks?
5. A market analyst determines 61.3% of mid-cap funds available to be added to his client's portfolio outperformed their S&P benchmarks over the past 3 years. (a) When choosing funds at random, what is the likelihood the first fund to outperform its benchmark happens in less than six tries? (b) What is the likelihood in a random group if 12 funds, at least eight outperform their benchmarks?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:5. A market analyst determines 61.3% of mid-cap funds available to be added to his client's portfolio outperformed their
S&P benchmarks over the past 3 years.
(a) When choosing funds at random, what is the likelihood the first fund to outperform its benchmark happens in less
than six tries?
(b) What is the likelihood in a random group if 12 funds, at least eight outperform their benchmarks?
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