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The Multiplication Rule – Investment Perspective

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.

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