FIN360 Practice Problems for Fall Break
1. Suppose the Powerball management decides to change the configuration of the lottery
so that the range of possible numbers of each of six numbers chosen is 1 to 50.
a. What is the probability of matching all six numbers?
b. What are the odds of matching all six numbers?
2. Suppose we have five employees who we can assign to three ranked positions: portfolio
manager, assistant portfolio manager, and second assistant portfolio manager. How
many possible ways that we can choose employees for these positions?
3. Suppose a portfolio manager can select securities from a list of 100 securities. If the
portfolio manager feels that he should have fifteen securities in the portfolio, and the
selection of the securities depends on ordering,
1) What is the appropriate formula to use to determine the number of possible
portfolios
2) How many different choices can this portfolio manager have?
4. Assume that you are applying for three jobs, one with the firm of SCS, one with the firm of
DCH, and the last with the firm House of Pancakes. Assume the probability that you get a
job offer from Smith et al. is 25%, the probability of getting an offer from Dewey et al. is
40%, and the probability of getting an offer from House et al is 55%. (Assuming the
probability of getting an offer from each company is independent)
What is the probability that you will get a job offer from SCS. or DCH.?
5. Consider the following probability distribution:
Outcome
Probability
Value of
outcome
A
5%
30%
