Research has shown that 70% of new Small Medium Enterprises (SMEs) are started by graduates

while 30% are started by non-graduates. It is also known that 60% of SMEs started by graduates are

successful i.e. they survive beyond 3 years, while only 20% of those started by non-graduates are

successful.

a) What is the probability that a new SME will not be successful? (2)

b) If it is known that a new SME is successful, what is the probability that it was started by a

graduate? (2