Cima C03 Exam Question No 26

Question No 26:

Difference between General "And" Probability?

General Multiplication: conditional outcomes
P(A and B)=P(B)*P(A/B)

eg- if sales don't improve, there's a 70% chance we'll go under - P(A). There's a 20% chance that sales will improve - P(B). What's the probability of us going under? (PB does not depend on PA, but PA depends on PB) ∴ P(B)P(A/B)=0.80.7=0.56 - there's a 56% chance of us going under.