- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 8. Probability Concepts
- Subject 2. Unconditional, Conditional, and Joint Probabilities

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**CFA Practice Question**

Given that P(Jane goes to Miami) = 50% and P(Jane attends the Super Bowl given she goes to Miami) = 20%, then P(Jane goes to Miami AND attends the Super Bowl) = ______.

B. 45%

C. 40%

A. 10%

B. 45%

C. 40%

Correct Answer: A

From the tree diagram, P(Jane goes to Miami AND she attends the Super Bowl) = P(Jane goes to Miami) times P(Jane attends Super Bowl given she goes to Miami) = (0.5)(0.2) = 0.1. So, P(Jane goes to Miami AND attends Super Bowl) = 10%.

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**User Contributed Comments**
8

User |
Comment |
---|---|

jmcarr02 |
multiplication rule for independent events... |

solnce |
No, this a multiplication rule for dependent events. Jane attends Super Bowl given she attends Super Bowl is a conditional event. |

Nightsurfer |
As if she wouldn't go to the SuperBowl. |

o123 |
...maybe she just went for the after parties! |

fedha |
o123 very funny!! P(JS) = P(J)*P(J|S) P(JS) = 0.5*0.2 P(JS) = 0.10 ~10% |

sgossett86 |
I want to live like jane after i get my cfa |

JMORALES |
Jane attends super bowl given she attends super bowl = Jane attends super bowl given she goes to Miami... ??? These are not the same, yet the question and answer makes them the same?? |

mdejesus |
Making the tree diagrams is way easier for me than thinking of the formulas. |