You are working for a renowned head hunting company in midtown manhattan. your job is to identify high potentials for the financial services industry. the prior probability that someone you will consider is a high potential is 0.03. if someone is a high potential, their probability of having a degree from an ivy league school is 0.6 and the probability that they have an ivy league degree if they are not a high potential is 0.05. the person you are considering has an ivy league degree. what is the probability that they are a high potential? a. 0.03 b. 0.27 c. 0.33 d. 0 e. 0.66

B. 0.27

Step-by-step explanation:

We have these following probabilities:

A 3% probability you will consider someone with high potential.

A 97% probability that you consider someone who does not have high potential.

If a person has high potential, there is a 60% probability that she has an Ivy League degree.

If a person does not have high potential, there is a 5% probability that she has an Ivy League degree.

This can be formulated as the following problem:

What is the probability of B happening, knowing that A has happened.

It can be calculated by the following formula

Where P(B) is the probability of B happening, P(A/B) is the probability of A happening knowing that B happened and P(A) is the probability of A happening.

In this problem, we have that:

What is the probability that a person has high potential, given that they have a Ivy League degree?

P(B) is the probability that a person has high potential. So P(B) = 0.03.

P(A/B) is the probability that a person has an Ivy League degree, given that she has high potential. So P(A/B) = 0.6.

P(A) is the probability that a person has an Ivy League degree. It is 0.6 of 0.03 and 0.05 of 0.97. So

What is the probability that they are a high potential?

The correct answer is:

B. 0.27

step-by-step explanation: noo