Question
Suppose that the reliability of a COVID test is
specified as follows: Of people having COVID, 90% of the test detect the disease but 10% go undetected. Of people free of COVID, 99% of the test are judged COVID–ive but 1% are diagnosed as showing COVID+ive. From a large population of which only 0.1% have COVID, one person is selected at random, given the COVID test, and the pathologist reports him/her as COVID+ive. What is the probability that the person actually has COVID?Solution
Let E denote the event that the person selected is actually having COVID and A the event that the person's COVID test is diagnosed as +ive. We need to find P(E|A). Also, E’ denotes the event that the person selected is actually not having COVID. Clearly, {E, E'} is a partition of the sample space of all people in the population. We are given that P(E) = 0.1% = 0.1/100 = 0.001 P(E') = 1 – P(E) = 0.999 P(A|E) = P(Person tested as COVID+ive given that he/she is actually having COVID) = 90% = 90/100 = 0.9 and P(A|E') = P(Person tested as COVID +ive given that he/she is actually not having COVID) = 1% = 1/100 = 0.01 Now, by Bayes' theorem P(E|A) = [P(E) × P(A|E)]/[P(E) × P(A|E) + P(E') × P(A|E')] = [0.001 × 0.9]/[0.001 × 0.9 + 0.999 × 0.01] = 90/1089 = 0.083 approx.
XYZ Ltd. is a medium-sized manufacturing company. Its summarized Balance Sheet and additional financial information for the year ended 31st March 2024 a...
A company has the following details:
• Net Profit: ₹12 lakh
• Equity: ₹60 lakh
• Debt: ₹40 lakh
• Interest: �...
A firm’s gross profit is ₹50 lakh, sales are ₹2 crore. What is its gross profit margin?
A company’s Profit before tax for the year is ₹6,00,000. Depreciation charged is ₹50,000. During the year, trade debtors increased by ₹40,000 an...
Which of the following is a useful liquidity metric for short-term creditors?
EBIT = ₹1,00,000; Fixed Financial Cost = ₹25,000; Contribution = ₹2,00,000;
Fixed Operating Cost = ₹1,00,000
Calculate Combined Leverage.
A company earns ₹20,00,000. Capitalisation rate is 10%. Equity capital is ₹1,00,00,000 (₹10 each). Dividend payout ratio is 40%. According to Walt...
While preparing cash flow statement, an entity (other than a financial institution) should disclose the dividends received from its investment in shares...
What is MIBOR?
Interest received on Bonds will come in which of the following activities in the Cash Flow Statement?