Add and multiply rules

CFA Level I Quant
#1

How would I distinguish based on the question that I should use the multiplication or addition rule when calculating probability? Is there a word or phrase that signifies one or the other?

#2

and=multiply

or=add

HOWEVER, when using the or (union) you must subtract the intersection of the events.

i.e. P(AUB) = P(A) + P(B) - P(AB)

This is because the probability that A or B happens is the probability that either event could occur minus the probability that the events occur together.

#3

P(A or B) = P(A) _ + _ P(B) – P(AB)

(Fixed that for you.)

#4

^ Oops, thanks S2000!

#5

My pleasure.