Page 7 - FINAL CFA I SLIDES JUNE 2019 DAY 3
P. 7
Session Unit 2:
9. Probability Concepts
LOS 9.f: Calculate and interpret 1) the JP of two events,
2) the p that at least one of two events will occur, given the p of each and the JP of the two events, and 3) a JP
of any number of independent events, p..173
In simple terms/meaning?
If an interest rate increase will occur 40% of the
time and lead to a recession 70% of the time when
it occurs, the JP of an interest rate increase and a
resulting recession is (0.4)(0.7) = (0.28) = 28%.
