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Odds in favour of winning are quoted as 3 to 2. What is the probability of winning?
AThe probability is 0.66
BThe probability is 1.50
CThe probability is 0.40
DThe probability is 0.60
Answer & Solution
Correct answer: D. The probability is 0.60
1. Odds express the probability of success as a ratio to the probability of failure.
2. Odds of 3 to 2 mean success is 3 parts against 2 parts of failure.
3. Those parts make five in all, so success takes 3 of the 5 parts.
4. Three divided by five is 0.60, which is the probability of winning.
5. The value 0.40 is the probability of losing, the other two parts of the five.
6. The value 1.50 is the odds ratio itself, and no probability may exceed one.
_Source: OpenStax Introductory Business Statistics (CC BY 4.0), Ch 3 "Probability Topics", section 3.1 Terminology_
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