- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Probability Concepts
- Subject 4. Multiplication Rule for Independent Events

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**CFA Practice Question**

Suppose that P(A and B) = 0.08 and P(B) = 0.2. If A and B are independent, what is P(A)?

B. 0.30

C. 0.40

A. 0.12

B. 0.30

C. 0.40

Correct Answer: C

If A and B are independent then P(A) = P(A|B) = P(AB)/P(B) = 0.08/0.20 = 0.40.

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**User Contributed Comments**
1

User |
Comment |
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lordcomas |
P(A and B) = P(A) x P(B) then: 0.08 = P(A) x 0.2 solve for P(A)... so: P(A) = 0.08 / 0.2 P(A) = 0.4 |