- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 8. Probability Concepts
- Subject 2. Unconditional, Conditional, and Joint Probabilities
CFA Practice Question
The probability that a mutual fund will generate a positive return in the next 12 months is called ______.
A. a conditional probability
B. an unconditional probability
C. a joint probability
Explanation: An unconditional probability takes the form of P(A), the probability that an event (A) will happen. It is unconditional because it is not conditioned on any other event.
User Contributed Comments 2
| User | Comment |
|---|---|
| Kevdharr | Actually, wouldn't this be a conditional probability due to the fact that a mutual fund's performance is conditional upon the performance of the underlying securities? Just sayin'.... |
| lighty0770 | Agree with kevdharr |