- CFA Exams
- CFA Exam: Level I 2021
- Study Session 2. Quantitative Methods (1)
- Reading 8. Probability Concepts
- Subject 2. Unconditional, Conditional, and Joint Probabilities

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**CFA Practice Question**

For the tree diagram shown at the right,

B. 3/7

C. 2/3

P(B | A) = ______

A. 1/3

B. 3/7

C. 2/3

Correct Answer: C

From the tree diagram, we know that 0.3 times P(B | A) = 0.2. Now, 0.3x = 0.2 yields x = 0.2/0.3 = 2/3. Thus, P(B | A) = 2/3.

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**User Contributed Comments**
6

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

gth763s |
P(B|A)=0.2, P(AB)=.06 |

mordja |
No P(B|A) = 2/3 P (AB) = 0.2 |

fedha |
Here is how I solved the problem P(B|A) = P(BA)/P(A) P(B|A) = 0.2/0.3 P(B|A) = 0.667 ~ 2/3 |

Scc0813 |
Why is 0.2 P(AB) and not P(B|A)? |

choas69 |
P(AB) = P(A) x P(B/A) 0.2 = 0.3 x P(B/A) P(B/A)= 0.2/0.3 |

choas69 |
scc 0.2 is the result of A and B together not B given A |