Question：

The probability of Event A is 40%. The probability of Event B is 60%. The joint probability of AB is 40%. The probability (P) that A or B occurs, or both occur, is closest to:

A. 60%.

B. 40%.

C. 84%.

Answer = A

P(A or B) = P(A) + P(B) – P(AB) = 0.40 + 0.60 – 0.40 = 0.60 or 60%.

CFA Level I

"Probability Concepts," Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, and David E. Runkle

Section 2

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