A Hospital Reports That Two Patients Have Been Admitted Who

question 10

Multiple Choice

A hospital reports that two patients have been admitted who have contracted Crohn's disease. Suppose our experiment consists of observing whether each patient survives or dies as a result of the disease. The simple events and probabilities of their occurrences are shown in the table (where S in the first position means that patient 1 survives, D in the first position means that patient 1 dies, etc.) . $$\begin{array}{l}\text { Simple Events Probabilities }\\\begin{array} { l l } S S & 0.52 \\S D & 0.20 \\D S & 0.14 \\D D & 0.14\end{array}\end{array}$$ Find the probability that both patients survive.

• A) 0.52
• B) 0.2704
• C) 0.14
• D) 0.34

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Definitions:

Firm Commitment Underwriting

A type of underwriting where the underwriter buys the entire offering from the issuer and sells it to investors, assuming full financial risk.

Underwriting Spread

The difference between the amount underwriters pay to acquire securities from the issuer and the price at which they sell these securities to investors.

Shares

Portions of ownership in a corporation or financial asset available to investors.

Market Value

Market value is the current price at which an asset or service can be bought or sold in a marketplace, reflecting the value that market participants assign to it.