Two Percent of the Customers of a Store Buy Cigars

question 136

Multiple Choice

Two percent of the customers of a store buy cigars. Half of the customers who buy cigars buy beer. 25 percent who buy beer buy cigars. Determine the probability that a customer neither buys beer nor buys cigars.

• A) 0.98
• B) 0.95
• C) 0.75
• D) 0.96
• E) 0.50

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Definitions:

Nominal Rate

The rate of interest before adjustments for inflation or other factors that affect the true cost of borrowing or the real yield on an investment.

Effective Rate

The actual interest rate on an investment or loan, taking into account the effect of compounding over a given period of time.

Effective Annual Rate

It is the interest rate that is adjusted for compounding over a given period. Essentially, it represents the actual annual return on an investment or the actual cost of borrowing.

Per Month

A recurring period or frequency, indicating that an action or event occurs or is calculated on a monthly basis.