The Following Table Shows the Results of a Survey of 360

question 209

Multiple Choice

The following table shows the results of a survey of 360 authors by a (fictitious) publishing company: $$\begin{array} { | l | l | l | l | } \hline & \begin{array} { l } \text { New } \\\text { Authors }\end{array} & \begin{array} { l } \text { Established } \\\text { Authors }\end{array} & \text { Total } \\\hline \text { Successful } & 50 & 40 & 90 \\\hline \text { Unsuccessful } & 120 & 150 & 270 \\\hline \text { Total } & 170 & 190 & 360 \\\hline\end{array}$$ A successful author is chosen at random.
Compute the estimated probability of the event that the successful author is established.

• A) \(\frac { 5 } { 9 }\)
• B) \(\frac { 19 } { 36 }\)
• C) \(\frac { 4 } { 9 }\)
• D) \(\frac { 5 } { 19 }\)
• E) \(\frac { 1 } { 9 }\)

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Definitions:

Marginal Investor

An investor whose actions and decisions regarding buying or selling a security are believed to represent the overall market sentiment.

Risk Averse

Risk averse describes an individual or entity that prefers to minimize risk, opting for lower returns with known risks rather than higher returns with unknown risks.

High-Beta Stock

Stocks that have a higher volatility compared to the market, often experiencing larger fluctuations in price than the overall market.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.