Alison Has All Her Money Invested in Two Mutual Funds

question 28

Multiple Choice

Alison has all her money invested in two mutual funds, A and B. She knows that there is a 40% chance that fund A will rise in price, and a 60% chance that fund B will rise in price given that fund A rises in price. There is also a 20% chance that fund B will rise in price. What is the probability that neither fund will rise in price?

• A) 0.24
• B) 0.36
• C) 0.40
• D) 0.64

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Definitions:

Erosion Prevention

Erosion prevention involves strategies and practices aimed at stopping soil erosion to protect land and water resources.

Oxygen Production

The process by which organisms, primarily plants and algae, produce oxygen as a byproduct of photosynthesis.

Enforceable Property Rights

The legal rights to use, control, and transfer property, and the assurance that these rights are protected and upheld by law.

Preserve Resources

The process or strategy of maintaining or saving natural resources to prevent depletion or degradation.