Original practice · fully worked
Original variant: recover indicator covariance from an exactly-one probability
Events A and B satisfy P(A)=0.70, P(B)=0.50, and P(exactly one of A and B)=0.40. Let I_A and I_B be their event indicators. Calculate Cov(I_A,I_B).
- A
-0.05 - B
0 - C
0.05 - D
0.35 - E
0.40
Answer and calculation
If x is the intersection probability, exactly one has probability 0.70+0.50-2x. Setting this to 0.40 gives x=0.40, so covariance is 0.40-(0.70)(0.50)=0.05, choice C.
Setup
Setup
Let x be the joint-event probability and express the exactly-one region through x.
Pr(exactly one)=Pr(A)+Pr(B)−2Pr(A∩B) 0.40=0.70+0.50−2x Model
Model
Solve for the joint probability and use the covariance identity for indicators.
Cov(IA,IB)=E[IAIB]−E[IA]E[IB] Compute
Compute
Substitute the joint probability and two marginals.
Cov(IA,IB)=0.40−(0.70)(0.50)=0.05 Answer
Answer
The indicator covariance is 0.05.
0.05(C)