The probability that house sales will increase in the next 6 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 6 months is estimated to be 0.89.The events increase in house sales and increase in interest rates in the next 6 months are
A)independent.
B)mutually exclusive.
C)collectively exhaustive.
D)None of the above.

Question

Quizplus · Accepted Answer

The events are not independent because the probability of both events happening together is not equal to the product of their individual probabilities (0.25 * 0.74 ≠ 0.89). They are not mutually exclusive because the probability of at least one of the events happening (0.89) is not equal to the sum of their individual probabilities (0.25 + 0.74 > 0.89), indicating that there is an overlap. They are not collectively exhaustive either, as their combined probability does not cover all possible outcomes (i.e., it does not equal 1).

The Probability That House Sales Will Increase in the Next