If you look at the four outcomes, you will notice that in two of them (the second and the fourth) the stock did not double. By the addition principle, the probability of one or the other (their union) is the sum of the two probabilities. Therefore,

P(ND) = 0.04 + 0.18 = 0.22.

Here is the tree diagram with both these probabilities shown:

	Stage 1	Stage 2	Outcome	Probability
			FDA approves & stock price does not double	0.04
			FDA does not approve & stock price does not double	0.18
			P(ND):	0.22

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