Did you know that according to a survey conducted by National Institute of Securities Markets (NISM) the average financial literacy rate in India is about 20%? This means that only one-fifth of the population knows about financial products and their functions and use. That is a very, very small number considering we have a population of 120 crores and counting. The very fundamental problems embedded in our mindset and culture is one of the main reason why our financial literacy is so low. It’s high time we change that.
One of the topics we learnt in middle school was the multiplication rule.
Two events are independent in the sense that the outcome of one event has no influence on the outcome of the other, then the probability that they both occur is computed by multiplying the probabilities of the individual events.
While in school we used it to calculate solve inane problems such as the probability of flipping coins, drawing cards, it’ll be interesting to see how we can apply this rule for our investment purposes.