Joint Probability | CFA® Level 1: CFA® Level 1 Exam | Test Prep

Joint Probability

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Question

A joint probability is expressed symbolically as:

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Explanations

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A. B. C. D.

C

A joint probability takes the form of P(AB), the probability that a an event A and an event B will both happen.

A joint probability refers to the probability of two events occurring simultaneously. In other words, it is the probability that both event A and event B happen at the same time.

Out of the options provided:

A. P(A | B) represents the conditional probability of event A occurring given that event B has already occurred. It is not a joint probability.

B. P(B | AB) represents the conditional probability of event B occurring given that both event A and event B have already occurred. It is not a joint probability.

C. P(AB) represents the joint probability of both event A and event B occurring simultaneously. This is the correct representation of a joint probability. Option C is the correct answer.

D. P(A or B) represents the probability of either event A or event B occurring. It is not a joint probability but rather a probability of a union of events.

Therefore, the correct answer is C. P(AB) represents the joint probability of events A and B occurring simultaneously.