SOLUTION: An investor owns three common stocks. Each stock, independent of the others, has equally likely chances of (1) increasing in value, (2) decreasing in value, or (3) remaining the sa

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Question 1183464: An investor owns three common stocks. Each stock, independent of the others, has equally likely chances of (1) increasing in value, (2) decreasing in value, or (3) remaining the same value. List the possible outcomes of this experiment. Estimate the probability at least two of the stocks increase in value.
Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!

     1  2  3
    ---------
  1) +  +  +
  2) +  +  -
  3) +  -  +
  4) -  +  +
  5) -  -  +
  6) -  +  -
  7) +  -  -
  8) -  -  -

The 8 outcomes are equally likely, so the probability of each is 1/8.

In 4 of the 8 possible outcomes, 2 or more of the stocks increase in value. So the probability that at least 2 stocks increase in value is 4/8 = 1/2.

Note that result can be obtained using logical reasoning: for each case where 2 or 3 stocks increase in value, there is an "opposite" case in which 0 or 1 stocks increase in value. So in exactly half of the cases the number of stocks that increase in value is 2 or more.