Question

The probabilities that stock A will rise in price is 0.42 and that stock B will rise in price is 0.58. Further, if stock B rises in price, the probability that stock A will also rise in price is 0.14. a. What is the probability that at least one of the stocks will rise in price? (Round your answer to 2 decimal places.)

Answer 1

0.92

Explanation:

a. What is the probability that at least one of the stocks will rise in price? (Round your answer to 2 decimal places.)

P(A) = 0.42

P(B) = 0.58

P(A|B) = 0.14

Step 1

P(A|B) × P(B) = 0.14 × 0.58

= 0.0812

The probability that at least one of the stocks will rise in price

P(A) + P(B) - 0.0812

0.42 + 0.58 - 0.0812

= 1 - 0.0812

= 0.9188

Approximately to 2 decimal place = 0.92