Q12. A fundamental analyst studying 100 potential companies for inclusion in her stock portfolio uses the following three screening criteria:

Screening Criterion        Number of Companies meeting the screen

Market-to-Book Ration>4                20

Current Ratio>2                        40

Return on Equity>10%                   25

Assuming that the screening criteria are independent, the probability that a given company will meet all three screening criteria is closest to:

A. 2.0%

B. 8.5%

C 20.0%

D. 85.0%

答案和详解如下：

Q12.     A     07 Modular Level 1, Vol.1, pp325-327  Study Sessions 2-8-e

The joint probability of the three independent criteria:

0.2*0.4*0,25 = 0.02 or 2%n of the 100 companies.