Joint Probability of a Number of Independent Events

If two events are independent, then the joint probability of these two independent events is calculated as:

P(A and B) = P(A) x P(B)

Example

Suppose we roll two dice. The joint probability of getting a 1 on first die and a 6 on the second die is given as follows:

Probability of getting a 1 on first die, P(A) = 1/6

Probability of getting a 6 on second die, P(B) = 1/6

P(A and B) = 1/6 * 1/6 = 1/36 = 0.0278

The same rule can be applied to calculate the joint probability of any number of independent events. For example, if there are three independent events, A, B and C, their joint probability will be:

P(A and B and C) = P(A) x P(B) x P(C)

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Data Science in Finance: 9-Book Bundle

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Master R and Python for financial data science with our comprehensive bundle of 9 ebooks.

What's Included:

  • Getting Started with R
  • R Programming for Data Science
  • Data Visualization with R
  • Financial Time Series Analysis with R
  • Quantitative Trading Strategies with R
  • Derivatives with R
  • Credit Risk Modelling With R
  • Python for Data Science
  • Machine Learning in Finance using Python

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