Explanation:
Independent events are exactly that—independent of other events. Their probabilities are not affected by other events. Mutually exclusive events are one-or-the-other occurrences since one or the other happens, but not both.
(Book 2, Module 12.1, LO 12.b)
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Question 4
An analyst is a recent hire at Quant Analytics. During a recent discussion in the breakroom, the analyst and a colleague debated the difference between independent and mutually exclusive events. Which of the following statements is best positioned to help the analyst convince his colleague of the difference between the two concepts?
A
Independent events are those that have unconditional probability products, while mutually exclusive events can happen pairwise, but exclusively, of all other events.
B
Independent events have no effect on each other, while mutually exclusive events are one-or-the-other occurrences.
C
Independent events have slight effects on each other, while mutually exclusive events are one-or-the-other occurrences.
D
Independent events are independent of other events that have pairwise dependency but rely on each other, while mutually exclusive events are exclusive of all other events.
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