If two events A and B are mutually exclusive, what does the special rule of addition state?

The variance of a portfolio of risky securities is

For an inferior good:

Good Z is priced on Market #1 at $150. The same good is priced on Market #2 at $125. Which of the following describe(s) the process that will eliminate the arbitrage profit?
I). Investors will purchase Good Z on Market #1 and drive the price up
II). Investors will purchase Good Z on Market #2 and drive the price up
III). Investors will sell Good Z on Market #1 and drive the price down

A company signs a long-term construction contract for $10 million. In the first Year of the contract, costs to date totaled $4 million, of an estimated $8 million in costs. The company received cash payments of $7 million. The gross profit recognized in year one, under the percentage of completion method would be: