Question 2 (40 Marks) a) Recent study shows that 41.5% of people who researched travel packages on the Internet booked the travel packages. 10.6% of people who did not research travel packages on the Internet booked the travel packages. Suppose that 53% of the people researched travel packages on the Internet. i. Define the related variables and draw tree diagram for the above (10marks) scenarios. ii. Prepare the contingency table for the above scenarios. (3 marks) iii. Given that a person booked travel packages, compute the probability that he or she researched travel packages on the Internet? (3 marks) iv. Are the two events, researched travel packages on the Internet and booked travel packages on the Internet, statistically independent? Explain your answer. (3 marks) b) Suppose you are trying to set up a portfolio consists of Stock X and Stock Y. The following information about the annual returns (per $1000 ) of each of these investments under different economic conditions is available along with the probability that each of these economic conditions will occur. Compute the: v. Compute the portfolio return and risk if you decided to invest 30% in (6 marks) Stock X and the remaining percentage is invested in Stock Y. End of pages. Question 2 (40 Marks) a) Recent study shows that 41.5% of people who researched travel packages on the Internet booked the travel packages. 10.6% of people who did not research travel packages on the Internet booked the travel packages. Suppose that 53% of the people researched travel packages on the Internet. i. Define the related variables and draw tree diagram for the above (10marks) scenarios. ii. Prepare the contingency table for the above scenarios. (3 marks) iii. Given that a person booked travel packages, compute the probability that he or she researched travel packages on the Internet? (3 marks) iv. Are the two events, researched travel packages on the Internet and booked travel packages on the Internet, statistically independent? Explain your answer. (3 marks) b) Suppose you are trying to set up a portfolio consists of Stock X and Stock Y. The following information about the annual returns (per $1000 ) of each of these investments under different economic conditions is available along with the probability that each of these economic conditions will occur. Compute the: v. Compute the portfolio return and risk if you decided to invest 30% in (6 marks) Stock X and the remaining percentage is invested in Stock Y. End of pages