Question

If the probability is 0.54 that Stock A will increase in value during the next month and the probability is 0.68 that Stock B will increase in value during the next month, what is the greatest possible value for the probability that neither of these two events will occur?

Answer 1

The probability that neither of both stocks increase is 0,14

Step-by-step explanation:

The Complement Rule states that the sum of the probabilities of an event and its complement must equal 1.

The data we have is the probability that Stock A or B increase, we are looking for the probability that neither occur, so we have to use the complement of each one.

Complement of Stock A =1-0.54=0.46

Complement of Stock B =1-0.68=0.32

If we want to know the probability of both events happening we have to multiply both complements.

Probability that neither of these two events will occur= 0.46 x0.32= 0,1472‬