Which Statement Is True About Mutually Exclusive Events

question 4

Multiple Choice

Which statement is true about mutually exclusive events?

• A)If events A and B cannot occur at the same time, they are called mutually exclusive.
• B)If either event A or event B must occur, they are called mutually exclusive.
• C)P(A) + P(B) = 1 for any events A and B that are mutually exclusive.
• D)None of these are correct.

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Definitions:

Benchmark Error

Use of an inappropriate proxy for the true market portfolio.

Capital Market Line

In the capital asset pricing model, a line that describes the risk-return trade-off for efficient portfolios, showing that higher risk leads to higher expected return.

Measurement Error

The difference between a measured value of quantity and its true value, often due to imperfections in measurement tools or techniques.

Black, Jensen, and Scholes

Refers to scholars who contributed to the development of financial theories and models, most notably the Black-Scholes model for pricing options.