- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 8. Probability Concepts
- Subject 1. Introduction

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**CFA Practice Question**

Which of the following is correct about a probability distribution?

II. The probability of each outcome must be between 0 and 1 inclusive.

III. Outcomes must be mutually exclusive.

I. The sum of the probabilities of all possible outcomes must equal 1.

II. The probability of each outcome must be between 0 and 1 inclusive.

III. Outcomes must be mutually exclusive.

A. I and II

B. I and III

C. I, II and III

**Explanation:**All these statements describe properties of a probability distribution.

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**User Contributed Comments**
4

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

vicks |
probability of each outcome is between 0 and 1 and not inclusive. the ans is wrong |

lilbut |
no.. the probability of an outcome cannot be exclusive.. |

bwbarksdale |
II is correct b/c the probability of something occuring could be 0, 1, or somewhere in between. |

GinnyB |
Indeed, the probabilities will include 0 (impossible) and 1 (definite). |