THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The probability that interest rates on housing loans will go up in the next 6 months is estimated to be 0.20.The probability that house sales will decrease is estimated to be 0.6.The probability that interest rates will go up and house sales will decrease is estimated to be 0.15.
-The probability of a decrease in house sales and not an increase in interest rates is:
A)0.45
B)0.25
C)0.20
D)0.05

Question

Quizplus · Accepted Answer

The probability of a decrease in house sales and not an increase in interest rates is found by subtracting the probability of both events happening together (interest rates going up and house sales decreasing) from the probability of house sales decreasing alone. Thus, 0.6 (probability of house sales decreasing) - 0.15 (probability of both happening) = 0.45.