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:

Just-In-Time Inventory

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

Inventory Levels

A measure of the quantity of goods and materials on hand in a business at any given time.

Planning

The process of defining goals, establishing strategies, and outlining tasks and schedules to achieve the goals.

Human Resources

The department within a business that is charged with finding, screening, recruiting, and training job applicants, as well as administering employee-benefit programs.