Question

In: Statistics and Probability

1. State whether the following is a classical or Bayesian (subjective) probability, and explain why (1...

1. State whether the following is a classical or Bayesian (subjective) probability, and explain why (1 pt for correct id and 1 pt for explanation):

a. The chance of getting a 5 on a fair 6-sided die is 1/6.

b. The chance that the replacement bill for the ACA will be passed by Congress before the end of the year is 5%.

c. There is a 95% chance of a major correction (drop of 20% or more) in the stock market in the next 6 months.

d. The chance a baby will be born male is 51%.

e. If you flip a fair coin many times, about 50% of the time you will have gotten heads.

Solutions

Expert Solution

(a) Classical probability

Explanation: It is equally probable that the top face of die will be any of the 6 numbers on the die: 1,2,3,4,5 or 6.

(b) Bayesian (subjective) probability:

Explanation: The chance that the replacement bill for the ACA will be passed by Congress before the end of the year is 5% is the probability based on prior knowledge of conditions that might be related to the events: here: the replacement bill for the ACA will be passed by Congress before the end of the year

(c) Bayesian (subjective) probability:

Explanation: There is a 95% chance of a major correction (drop of 20% or more) in the stock market in the next 6 months is the probability based on prior knowledge of conditions that might be related to the events: here: a major correction (drop of 20% or more) in the stock market in the next 6 months.

(d) Bayesian (subjective) probability:

Explanation: The chance a baby will be born male is 51% is the probability based on prior knowledge of conditions that might be related to the events: here: a baby will be born male.

(e) Classical probability

Explanation: It is equally probable that the top face of a fair coin will be any one of the two mutually exclusive and completely exhaustive events: Head and Tail.


Related Solutions

19. Classify the following statement as an example of classical​ probability, empirical​ probability, or subjective probability....
19. Classify the following statement as an example of classical​ probability, empirical​ probability, or subjective probability. Explain your reasoning. The probability that a randomly selected number from 1 to 400 is divisible by 6 is 0.165. This is an example of ___ probability since ____. 18.Classify the following statement as an example of classical​ probability, empirical​ probability, or subjective probability. Explain your reasoning. According to a​ survey, the probability that an adult chosen at random is in favor of a...
Comment on the type of probability you like the most (classical, empirical, subjective) and indicate why.
Comment on the type of probability you like the most (classical, empirical, subjective) and indicate why.
Bayesian probability is subjective insofar as we can start with almost any prior probability we want....
Bayesian probability is subjective insofar as we can start with almost any prior probability we want. Why are we then able to say that Bayesian probability can give us an accurate understanding of what the probability of an event is?
1a)State two advantages of Bayesian data analysis over a classical approach? 1b)Explain why one would need...
1a)State two advantages of Bayesian data analysis over a classical approach? 1b)Explain why one would need a sensitivity analysis on the choice of prior distribution ?.
Consider the following subjective probability distribution for a potential investment: State of the economy probability Estimated...
Consider the following subjective probability distribution for a potential investment: State of the economy probability Estimated rate of return Strong growth .1 25% Moderate growth .4 15 Weak growth .4 10 Recession .1 -12 Calculate the expected rate of return Calculate the variance Calculate the standard deviation Calculate the coefficient of variation Interpret your answers in a-d
Determine whether the following are examples of theoretical probability, subjective probability, or relative frequency. a) After...
Determine whether the following are examples of theoretical probability, subjective probability, or relative frequency. a) After taking the exam you believe there is a 90% chance that you passed. b) Last month the bus was on time 70% of the time so you believe that there is a 70% chance that the bus will be on time today. c) Your friend tells you her job interview went well and she believes there is a 75% chance that she will get...
What is probability? Describe classical, empirical, and subjective probability, and provide "real-world" examples of each. How...
What is probability? Describe classical, empirical, and subjective probability, and provide "real-world" examples of each. How can each of these types of probability apply to the business world? Do you think any one type is more useful in business than the others? Why or why not?
Determine whether the distribution is a discrete probability distribution. If not, state why.
Determine whether the distribution is a discrete probability distribution. If not, state why. x P(x) 0 0.1 1 0.5 2 0.05 3 0.25 4 0.1
State whether the following statement is true or false AND explain why: "An increase in the...
State whether the following statement is true or false AND explain why: "An increase in the interest rate paid on excess reserves will always cause an increase in the federal reserve funds rate."
1) determine whether the distribution represents a probability distribution if not state why x 15 16...
1) determine whether the distribution represents a probability distribution if not state why x 15 16 20 25 p(x) 0.2 0.5 0.7 -0.8 2) Suit sales: the number of suits sold per day at a retail store is shown in the table with corresponding probabilities find the mean, variance and standard deviation of the distribution x 0 1 2 3 4 P(X) .31 .42 .21 .04 .02 3) dice game: a person pays $2 to play a certain game by...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT