CMA Foundation · Fundamentals of Business Mathematics and Statistics · Probability
A bank in Chennai finds that the probability a loan applicant is a salaried person is 0.6 and that an applicant is a self-employed person is 0.3. These two categories are mutually exclusive. What is the probability that a randomly chosen applicant is neither salaried nor self-employed?
The probability is 0.10. Because the categories are mutually exclusive, the chance of being salaried or self-employed is 0.6 + 0.3 = 0.9. The probability of neither is the complement, 1 - 0.9 = 0.10.
- A0.10Correct
- B0.18
- C0.40
- D0.90
Explanation
For mutually exclusive events, P(S or E) = 0.6 + 0.3 = 0.9. The complement is 1 - 0.9 = 0.10. The value 0.18 comes from multiplying (0.6 x 0.3), which wrongly treats the events as independent, and 0.90 is the probability of being in either category.
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