Warning: It is important to note that multiplying individual probabilities together can only be done if the events that make up those probabilities are independent. If the events are dependent, this process is not valid.
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Subject 4. Multiplication Rule for Independent Events
. If we wish to calculate the probability that all three shares will rise in price on the same day, we can use the results above to get: 0.6 x 0.5 x 0.8 = 0.24 (i.e., the individual probabilities multiplied together) <span>Warning: It is important to note that multiplying individual probabilities together can only be done if the events that make up those probabilities are independent. If the events are dependent, this process is not valid. To calculate the probability that, of the three shares above, none will have a price rise on a particular day, we can multiply the probabilities of the complementary events