Graduate Management Admission Test (GMAT) Practice Test

The formula for determining the probability of either event A or event B occurring can be derived from the principles of probability. When calculating the probability of two events happening, it's important to account for the possibility that both events may occur at the same time.

The correct formula is P(A) + P(B) - P(A and B). This formula works because it adds the probabilities of each event individually and then subtracts the probability of both events occurring together. The reason for the subtraction is that by adding P(A) and P(B), the cases where both events occur are counted twice. Therefore, to ensure that each outcome is only counted once, we need to subtract the joint probability of the two events.

Considering this, the other options presented do not correctly account for the overlap between the two events. For example, simply adding P(A) and P(B) without any adjustments would not provide an accurate probability when both events can happen simultaneously. The multiplication in one of the choices does not apply in this context since the independent occurrences of A and B should not be multiplied when determining the union of probabilities. Hence, the comprehensive approach of P(A) + P(B) - P(A and B) ensures an accurate calculation for the probability of either event occurring.