A Pair of Fair Dice Is Tossed

question 194

Multiple Choice

A pair of fair dice is tossed. Events A and B are defined as follows. A: {The sum of the numbers on the dice is 4} B: {The sum of the numbers on the dice is 11} Identify the sample points in the event A ∪ B.

• A) {(1, 3), (2, 2), (3, 1), (5, 6), (6, 5)}
• B) {(1, 4), (2, 2), (4, 1), (5, 6), (6, 5)}
• C) {(1, 4), (2, 3), (3, 2), (4, 1), (5, 6), (6, 5)}
• D) There are no sample points in the event A ∪ B.

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Definitions:

Security Market Line

A graphical representation in the Capital Asset Pricing Model that shows the relationship between the expected return of an investment and its beta, representing risk.

APT

Stands for Arbitrage Pricing Theory, a model that predicts a security's returns using the linear relationship between its expected return and macroeconomic factors.

Factor Intensity

The measure of how much of a certain factor of production (labor, capital, etc.) is used in the production of a good or service.

APT Model

Arbitrage Pricing Theory Model, an alternative to the Capital Asset Pricing Model (CAPM), asserts that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indexes.