# Quantitative Methods - Quantitative Methods Section 2

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• Option : B
• Explanation : The multiplication rule is applied only when the two events A and B are independent.

• Option : C
• Explanation : Since the events are independent, P(A|B) = P(A) and P(B|A) = P(B).

 Scenario Probability of scenario Probability of closing down Decrease in customer base 30% 60% Maintaining the customer base 30% 50% 30% Increase in customer base 20% 10%

• Option : B
• Explanation : Using the total probability rule, the unconditional probability of closing down is given by: (0.3) (0.6) + (0.5) (0.3) + (0.2) (0.1) = 0.35 The probability that ShopKart will not close down is, 1 – 0.35 = 0.65 = 65%

• Option : A
• Explanation : The total probability rule is used to determine the unconditional probability, given conditional probabilities.

• Option : B
• Explanation : With Option A we are considering the expected value of EPS if interest rates increase. This requires the use of conditional probability. Option C has the term „different scenarios‟ which implies the use of conditional probabilities.