s 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) If it is known that a new SME has failed, what is the probability that it was started by a non-graduate? [6]

b) What is the probability that a new SME will be successful? [4]