Problem 2

Choi, Laibson and Madrian conducted an experiment to study the choices made in fund selection. Suppose 100 undergraduate students and 100 MBA students were selected. When presented with 4 S&P 500 Index funds that were identical expect for their fees, undergraduate and MBA students chose the funds as follows:

	Student Group
FUND	Undergraduates	MBA
Lowest cost fund	19	19
Second lowest cost fund	37	40
Third lowest cost fund	17	23
Highest cost fund	27	18

If a student is selected at random, what is the probability that he or she

A. selected the lowest or second lowest cost fund?

B. Selected the lowest cost fund and is an undergraduate?

C. Selected the lowest cost fund or is an undergraduate?

D. Given that a student is an undergraduate, what is the probability that he or she selected the highest cost fund?