CFA Mock Morning session Quants Q25 please, reading, solution, question, either

Makavelim3

I have been scratching my head for this question but it doesn't make any sense to me even after reading the explanation. Although I don't know what should be the solution for this question but I am not convinced the explanation either. Can any one of you please explain how P(A or B) and P(A or B or AB) are the same probabilities?

homie

Kiakaha Wrote:
-------------------------------------------------------
> think about it like a Venn diagram -- P(A) and
> P(B) are the two overlapping circles. If you just
> add together A and B, you will be 'double
> counting' the part where they overlap, P(AB).
>
> So you have to add them together and then subtract
> P(AB) to get the answer.
>
> I agree the wording is tricky and designed to
> throw us off....but the thing to remember is that
> P(A) + P(B) - P(AB) covers the possibility of A,
> or B, or both (again, think of the venn diagram).
>
> hope that helps.

This is perfect! Great answer. I totally forgot about the overlapping and then the potential for double counting...

pg 444 for all those confirming.

Much appreciated.



Edited 1 time(s). Last edit at Sunday, May 29, 2011 at 01:10AM by Matori.

MythosHF

Kiakaha Wrote:
-------------------------------------------------------
> think about it like a Venn diagram -- P(A) and
> P(B) are the two overlapping circles. If you just
> add together A and B, you will be 'double
> counting' the part where they overlap, P(AB).
>
> So you have to add them together and then subtract
> P(AB) to get the answer.
>
> I agree the wording is tricky and designed to
> throw us off....but the thing to remember is that
> P(A) + P(B) - P(AB) covers the possibility of A,
> or B, or both (again, think of the venn diagram).
>
> hope that helps.


hmm makes sense..Thanks!

kamara5

Miss*Yiota Wrote:
-------------------------------------------------------
> a typo ?... the choices include the proba with AB,
> and the explanation is definitely smthg
> else...really bizar

Quant is not my strongest, but I have no idea how to relate these two options...

Its sometimes sooo frustrating not having some type of live "professional" you can ask these questions...

dmar

a typo ?... the choices include the proba with AB, and the explanation is definitely smthg else...really bizar

jim8z3

Not only this, I mean there are so many questions in which I got tricked, mostly because they weren't clear enough. In fact, explanations have lot of gaps. I never had any problems schweser although the question are tough but I could never find a reason to doubt the questions or the solution provided.

Daniel1985

hahaha, this one just gave me a stroke. I was like WTF !!! still now, don't get how they dealt with the AB part man