CFA Level 1 Exam Practice: Probability of Selecting Maintenance Employee

Probability of Selecting Maintenance Employee

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Question

A selected group of employees of Unique Buying Services is to be surveyed with respect to a new pension plan. In depth interviews are to be conducted with each employee selected in the sample.

The employees are classified as follows.

Classification Event Number of Employees

Supervisors A 120 -

Maintenance B 50 -

Production C 1,460 -

Management D 302 -

Secretarial E 68 -

What is the probability that the first person selected is classified as a maintenance employee?

Answers

Explanations

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A. B. C. D. E.

A

There are 2000 employees of which 50 are from maintenance. So 50/2000 = 0.025.

To calculate the probability of selecting a maintenance employee as the first person from the survey sample, we need to determine the proportion of maintenance employees in the total employee population.

According to the given information, the number of employees in each classification is as follows:

Supervisors (A): 120 employees Maintenance (B): 50 employees Production (C): 1,460 employees Management (D): 302 employees Secretarial (E): 68 employees

To find the probability, we divide the number of maintenance employees by the total number of employees:

Probability = Number of maintenance employees / Total number of employees

Total number of employees = sum of employees in all classifications = 120 (A) + 50 (B) + 1,460 (C) + 302 (D) + 68 (E) = 2,000 employees

Number of maintenance employees = 50 (B)

Probability = 50 (B) / 2,000 (total employees) = 0.025

Therefore, the probability that the first person selected is classified as a maintenance employee is 0.025.

The correct answer is option A: 0.025.