The probability that house sales will increase in the next six months is estimated to be 0.25.The probability that the interest rates on housing loans will go up in the same period is estimated to be 0.74.The probability that house sales or interest rates will go up during the next six months is estimated to be 0.89.
- The events of 'increase in house sales' and 'increase in interest rates' in the next six months are
A) collectively exhaustive.
B) mutually exclusive.
C) statistically independent.
D) None of the above.

Question

Quizplus · Accepted Answer

The events of 'increase in house sales' and 'increase in interest rates' are not collectively exhaustive or mutually exclusive. This is because there is a probability that both events may occur together, which means they are not mutually exclusive. At the same time, there is a probability that neither event may occur, which means they are not collectively exhaustive. Additionally, they are not statistically independent as the probability of their joint occurrence is not equal to the product of their individual probabilities.

The Probability That House Sales Will Increase in the Next