- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Probability Concepts
- Subject 2. Unconditional, Conditional, and Joint Probabilities
CFA Practice Question
Supposing that P(A) = 0.2 and P(B|A) = 0.6, find P(AB).
A. 0.12
B. 0.30
C. 0.80
Explanation: The correct answer is P(AB) = P(B|A) P(A) = 0.6 x 0.2 = 0.12.
User Contributed Comments 3
| User | Comment |
|---|---|
| poomie83 | joint probablity |
| gfenney | But why is p(B) conditional on A having occured? |
| myron | Because that's the formula: P(A and B) = P(A) P(B|A) |