BUEC 232 Lecture Notes - Lecture 4: Warren Buffett, Conditional Probability, Thomas Bayes

• School: Simon Fraser University
• Department: Business Economics
• Course: BUEC 232
• Professor: all

Document Summary

Applies to a wide range of every day applications including: games of chance (gambling, google searches, voice recognition, quantum mechanics, venture capitalism, meteorology, and countless more! Individual outcomes are uncertain, but there is a regular distribution of outcomes in a large number of repetitions. There are three approaches to assessing the probability of an uncertain event: Based on prior knowledge of the process involved. T number total of number ways of the event elementary can occur outcomes. Based on observed data number total of number ways of event the elementary occur can outcomes. Based on a combination of an individual"s past experience, personal opinion, and analysis of a particular situation. Simple event (a): an outcome from a sample space with one characteristic e. g. drawing an ace from a deck of cards. Joint event (a and b: an event described by two or more characteristics e. g. drawing an ace that is also red.