Page 58 - FINAL CFA SLIDES DECEMBER 2018 DAY 3
P. 58
Session Unit 2:
LOS 9.o: Identify the most appropriate method to solve a particular 9. Probability Concepts
counting problem and solve counting problems using factorial,
combination, and permutation concepts, p.194/195
Combination, p194 Permutation, p.195
A special case of labelling: e.g. Only 2 categories feasible Special case of labelling when the when the
order of selection is important.
How may ways can you pick groups of How may ways can you pick different ordered
3 shares from a portfolio of 8 shares? groups of 3 shares from a portfolio of 8 shares?
Then (n – r) items (8 – 3 = 5) are not chosen (= 56) Then (n – r) items (8 – 3 = 5) are not chosen (= 336)
• nCr is the no. of possible ways (Combinations)
of selecting r items from a set of n items
when the order of selection is not important.
