CFA Practice Question

CFA Practice Question

Consider the following two independent events and corresponding probabilities:

Event A) The probability that the auto demand will rise more than 5% during the coming year is 60%.
Event B) The probability that the demand for cable television will rise more than 10% is 35%.

The probability that at least one event will occur is:
A. 53%
B. 74%
C. 26%
Explanation: Probability = 1 - Probability that neither event happens = 1 - (1 - 0.60) * (1 - 0.35) = 74%

User Contributed Comments 2

User Comment
arudkov A+B-AB=.6+.35-.6*.35=.74
akirchner1 Since there is a 60% chance that auto demand will rise by 5%, you know that at least ONE of the events will have a 60% chance of occurring. Thus, you can eliminate A. 53% and C. 26%.
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