Multiplication rule
The chance that several independent things all happen is the product of their individual chances. Ten things at 99.9% each all happen 99.0% of the time.
In plain English
It's why chains are weaker than their links: five steps at 90% each succeed together only 59% of the time. It works in reverse for backups: if either of two independent copies is enough, the system fails only when both fail, so two at 99% give 99.99%. The rule needs independence; shared causes make things fail together.
Uncle Gary explains
A system that needs ten components at 99.9% availability, all working at once, is up 99.0% of the time: about 87 hours of downtime a year.
Why it matters for your money
An investment case that chains several hopeful assumptions is much weaker than any single assumption looks. Multiply the probabilities before believing the story.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.