Alison Has All Her Money Invested in Two Mutual Funds

question 36

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 at least one of the funds will rise in price?

• A) 0.24
• B) 0.36
• C) 0.60
• D) 0.76

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Definitions:

Agricultural Risk Coverage Program

A U.S. government program that provides financial assistance to agricultural producers when crop revenues or yields fall below guarantee levels.

Agricultural Act

Legislation passed to regulate agricultural markets, support farm incomes, and provide price supports for farmers.

Food, Conservation, and Energy Act

A piece of U.S. legislation, often referred to as the 2008 Farm Bill, which governs agricultural and food policy, including conservation, energy, and support for farmers.

Countercyclical Payments

Government payments to individuals or businesses that increase during economic downturns and decrease during periods of economic growth.