Company A has probability .07 of defaulting. Company B has probability of .001 of defaulting. Assume...
Company A has probability .07 of defaulting. Company B has probability of .001 of defaulting. Assume that the event that company A defaults is independent of the event that company B defaults.
a) What is the probability that both company A and company B defaults?
b) What is the probability that either company A or company B or both default?
Homework Answers
If A and B are independent events , then
P(A
B) = P (A) . P(B)
and
p(A
B) = P(A) + P(B) - P(A) . P(B)
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