- 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**

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.

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**User Contributed Comments**
2

User |
Comment |
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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 |