00:01
We're looking at two stocks.
00:03
The probability that a rises in price, so let's say event a is 0 .4, probability that b rises in price is 0 .6.
00:12
However, if b rises in price, the probability that a rises is 0 .8.
00:18
So a given b is 0 .8.
00:24
So this is important.
00:26
And what is the probability at least one of the stocks will rise in price? what we're trying to solve here is the union, a or b, or both.
00:40
How can we get from the information we have to this information here? well, we can use this.
00:53
So if we take the conditional probability law that a given b equals the intersect over b.
01:10
From here we can work out the intersect, the probability that exactly both happen...