Joint Probability Question (from Schweser) following, situation, increase, occurred, interest

hanvinh

Schweser says the answer is A, but I think it's C. Isn't a joint probably a situation of "A" given "B", thus both have to occur?

Which of the following is a joint probability? The probability that a:

A)stock pays a dividend and splits next year.
B)company merges with another firm next year.
C)stock increases in value after an increase in interest rates has occurred.

Your answer: C was incorrect. The correct answer was A) stock pays a dividend and splits next year. A joint probability applies to two events that both must occur.

johnnyBuz

narayanan87 Wrote:
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> P(A|B) means B has happened, A may or may NOT
> happen. P(AB) means both happen

Correction.

Probability is just the chance of something occurring, the figure by itself tells us nothing about whether the event has occurred.

jim8z3

Keyword for joint probability is "and" while keywords for conditional are "given that", "after" etc.

ramdabom

P(A|B) means B has happened, A may or may NOT happen. P(AB) means both happen

ftwcfa

Yes, it can be quite confusing.

Maybe easier way to retain this is thru their symbols.

Joint Probability is: P(AB)

Probability of A given B is: P(A|B)

And relationship between the two is: P(AB) = P(A|B) * P(B)

Hope this helps.