Quantitative Methods - Quantitative Methods Section 2
16. If events A and B are mutually exclusive, then which of the following is true?
- Option : C
- Explanation : Mutually exclusive events are those events which cannot happen together, i.e. there is no intersection between the two events. Therefore, both P (A|B) and P (AB) must be equal to zero
17. The probability of any event can be best defined as a number between:
- Option : C
- Explanation : The two defining properties of a probability are as follows: The probability of any event, E, is a number between 0 and 1. The sum of the probabilities of any set of mutually exclusive and exhaustive events equals one.
- Option : B
- Explanation : An empirical probability is “a probability estimated from data as a relative frequency of occurrence.”.
20. Which of the following is most likely a subjective probability?
- A
The probability that KSE 100 index will outperform LSE 100 index over a 5 year period.
- B
The probability of a particular outcome when only five possible outcomes exist.
- C
The probability of Kay Electronics going bankrupt changes after adjusting it to the reduced confidence in electronics’ companies.
- Option : C
- Explanation : Empirical: it is based on past data. A Priori: it is based on logical reasoning. Subjective: it is based on personal judgment.
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