The Phrase "Dogs of the Dow" Refers to the Stocks

question 225

Multiple Choice

The phrase "Dogs of the Dow" refers to the stocks listed in the Dow with the highest dividend yield. This table shows the top ten stocks of the "Dogs of the Dow" list. If you selected four of these stocks at random, what is the probability that your selection included the company with the highest yield and excluded the company with the lowest yield $$\begin{array} { | c | c | c | } \hline \text { Symbol } & \text { Company } & \text { Yield } \\\hline \text { SBC } & \text { SBC Communications } & 5.46 \% \\\hline \text { GM } & \text { General Motors } & 5.46 \% \\\hline \text { MRK } & \text { Merck } & 5.42 \% \\\hline \text { MO } & \text { Altria } & 4.62 \% \\\hline \text { VZ } & \text { Verizon } & 4.32 \% \\\hline \text { JPM } & \text { JP Morgan Chase } & 3.78 \% \\\hline \text { C } & \text { Citigroup } & 3.64 \% \\\hline \text { PFE } & \text { Pfizer } & 3.12 \% \\\hline \text { DD } & \text { DuPont } & 2.96 \% \\\hline \text { GE } & \text { General Electric } & 2.46 \% \\\hline\end{array}$$

• A) \(\frac { 1 } { 15 }\)
• B) \(\frac { 1 } { 9 }\)
• C) \(\frac { 4 } { 15 }\)
• D) \(\frac { 9 } { 10 }\)
• E) \(\frac { 2 } { 9 }\)

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Definitions:

Error Costs

The expenses associated with making incorrect decisions or judgments, including costs of correction and opportunity costs.

Uncertain Conditions

Situations where outcomes or future events are unknown or unpredictable.

Unsold Merchandise

Items that remain in stock and are not sold within a certain period, potentially leading to inventory excess or losses.

Demanded Design

A design approach or product feature specifically requested or sought after by consumers or the market.