For this query, the time presented seems unclear to me. I understand that the rate of return is determined by total return over the investment. Assuming Matt received $400 as dividends without reinvesting them into additional shares, his total return across two years amounted to $500. Conversely, if the dividends were reinvested into the stock—something that typically happens with a 401(k) or IRA—his ROI would render a mere 6% due to only a $100 gain on a $1500 investment. In an actual market scenario, it’s likely that Matt would have experienced about a 5% return on a solid stock, while Bella would have had approximately 0.05% from a savings account.
I hope this was helpful!;)
Assuming that every material in their respective categories has an equal likelihood of selection.
Categories:
(a) Wood types for cabinets: birch, maple, cherry.
Each wood type has a selection probability of 1/3.
(b) Finish types: transparent, semi-transparent.
Each finish type has a 1/2 chance of being selected.
(c) Knob types: bronze, steel, wood.
Each knob material carries a probability of 1/3.
The selection of materials for the cabinet, finish, and knobs is independent of one another.
Consequently,
Probability(birch wood AND bronze knob) = (1/3)*(1/3) = 1/9
Probability(wood knob) = 1/3
Probability(transparent stain) = 1/2
Probability(cherry wood AND semi-transparent stain) = (1/3)*(1/2) = 1/6
