Quantitative Methods Q163
| Scenario | Probability of scenario | Probability of closing down |
| Decrease in customer base | 30% | 60% |
| Maintaining the customer base 30% | 50% | 30% |
| Increase in customer base | 20% | 10% |
Based on the analyst’s estimates, the probability that ShopKart will not close down in the next six months is closest to:
- Option : B
- Explanation : Using the total probability rule, the unconditional probability of closing down is given by: (0.3) (0.6) + (0.5) (0.3) + (0.2) (0.1) = 0.35 The probability that ShopKart will not close down is, 1 – 0.35 = 0.65 = 65%
