CFA Practice Question

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CFA Practice Question

Which of the following is correct about a probability distribution?

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.

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).
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