The URS construction company has submitted two bids, one to build a large hotel in London and the other to build a commercial office building in New York City. The company believes it has a 40% chance of winning the hotel bid and a 25% chance of winning the office building bid. The company also believes that winning the hotel bid is independent of winning the office building bid. What is the probability the company will lose both contracts?
A) 0.55
B) 0.45
C) 0.10
D) 0.75

Question

Quizplus · Accepted Answer

To find the probability of losing both contracts, we calculate the probability of not winning each and then multiply those probabilities together, since the events are independent. The probability of losing the hotel bid is 1 - 0.40 = 0.60, and the probability of losing the office building bid is 1 - 0.25 = 0.75. Multiplying these together gives 0.60 * 0.75 = 0.45.

The URS Construction Company Has Submitted Two Bids, One to Build