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 no increase in house sales in the next 6 months are
A) independent.
B) mutually exclusive.
C) collectively exhaustive.
D) B and C

Question

Quizplus · Accepted Answer

The events "increase in house sales" and "no increase in house sales" are mutually exclusive (they cannot happen at the same time) and collectively exhaustive (they cover all possible outcomes). Therefore, choices B and C are correct. However, they are not independent because the probability of one event (increase in house sales) affects the probability of the other event (no increase in house sales). Therefore, choice A is incorrect.

The Probability That House Sales Will Increase in the Next