Financial Risk Manager Part 1

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Explanation:

Since the two events are mutually exclusive (a stock return cannot be both below -5% and above +5% at the same time), the probability of either event occurring is simply the sum of their individual probabilities:

P(R < -5% or R > +5%) = P(R < -5%) + P(R > +5%) = 16% + 18% = 34% = 0.34

This follows the basic probability rule for mutually exclusive events: P(A ∪ B) = P(A) + P(B) when A and B are mutually exclusive.

Explanation:

P(R < -5% or R > +5%) = P(R < -5%) + P(R > +5%) = 16% + 18% = 34% = 0.34

This follows the basic probability rule for mutually exclusive events: P(A ∪ B) = P(A) + P(B) when A and B are mutually exclusive.

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Calculate the probability that a stock return is either below -5% or above 5%, given:

P(R < -5%) = 16% P(R > +5%) = 18%

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NNikitesh

Last updated: February 2, 2026 at 10:22

0.02

33.3%

0.32

33.3%

0.34

33.3%

0.16

Financial Risk Manager Part 1

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Comments (0)

Get started today

Calculate the probability that a stock return is either below -5% or above 5%, given: P(R < -5%) = 16% P(R > +5%) = 18%

Comments (0)

Calculate the probability that a stock return is either below -5% or above 5%, given:

P(R < -5%) = 16% P(R > +5%) = 18%