CFA Practice Question

CFA Practice Question

Events A and B are mutually exclusive. P(A) = 0.45, P(B) = 0.27. The probability of neither A nor B occurring equals ______.
A. 0.72
B. 0.88
C. 0.28
Explanation: The probability of neither A nor B occurring equals one minus the probability of either A or B occurring i.e. P(neither A nor B) = 1 - P(A or B). Now, P(A or B) = P(A) + P(B) - P(A and B). Also, for mutually exclusive events, P(A and B) = 0 by definition. Therefore, P(A or B) = 0.45 + 0.27 = 0.72. Finally, P(neither A nor B) = 1 - P(A or B) = 1 - 0.72 = 0.28.

User Contributed Comments 4

User Comment
AkuK missed that "mutually exclusive" ...
sh21 good question
mary11 I was finally happy I may have got one of these questions right - then I missed the mutually exclusive portion.
mrpman damn mutual exclusives!!!!!!!
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