Skip to content

FRM Part I · FRM Exam Part I · Fundamentals of Probability

A trader states that events A and B are mutually exclusive, with P(A) = 0.20 and P(B) = 0.50. What is P(A | B), the probability of A given that B has occurred?

P(A given B) is zero. Because A and B are mutually exclusive, they cannot both occur, so the joint probability is zero and the conditional probability is zero divided by 0.50. The value 0.20 would only hold under independence.

  1. A0Correct
  2. B0.20
  3. C0.10
  4. D0.40

Explanation

If A and B are mutually exclusive, P(A∩B) = 0, so P(A|B) = 0/0.50 = 0. The value 0.20 would apply only if A and B were independent, and 0.10 is the product P(A)P(B).

Did you get it right without looking?

One question tells you little. A timed set on Fundamentals of Probability shows your real accuracy, how long you take and where you lose marks.

Practise Fundamentals of ProbabilityFree diagnostic mock

More Fundamentals of Probability questions