Question

An equity analyst needs to select 3 stocks for the upcoming year and rank these securities in terms of their investment potential.

If the analyst has narrowed down the list of potential stocks to 7, in how many ways can she choose and rank her top 3 picks?

a) 21 b) 35 c) 210 d) 420 e) 840

Answer 1

The correct option is C) 210.

Explanation:

Consider the provided information.

The analyst has narrowed down the list of potential stocks to 7. She choose and rank her top 3 picks.

Since the order matter so we will use permutation.

The formula for permutation is:
`^(n)P_(r)=(n!)/((n-r)!)`

Substitute n=7 and r=3 in above formula.

`^(7)P_(3)=(7!)/((7-3)!)`

`^(7)P_(3)=(7!)/(4!)`

`^(7)P_(3)=210`

Hence, the correct option is C) 210.