Question

How many combinations of three high-risk stocks could you randomly select from seven high-risk stocks? Number of ways What is the probability that you would obtain the three highest-returning stocks? (Round your answer to 4 decimal places.) Probability

Answer 1

Using the combination formula, there are 35 ways to chosen the stock, and a 0.0286 = 2.86% probability that you would obtain the three highest-returning stocks.

The order in which the stocks are chosen is not important, hence the combination formula is used to solve this question.

What is the combination formula?

$C_{n,x}$ is the number of different combinations of x objects from a set of n elements, given by:

$C_{n,x} = \frac{n!}{x!(n-x)!}$

In this problem, 3 stocks are taken from a set of 7, hence:

$C_{7,3} = \frac{7!}{3!4!} = 35$

Hence the probability that you would obtain the three highest-returning stocks is:

p = 1/35 = 0.0286 = 2.86%.

More can be learned about the combination formula at https://brainly.com/question/25821700

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