bmaggie

Which of the following sets of numbers does NOT meet the requirements for a set of probabilities?

A) (0.10, 0.20, 0.30, 0.40, 0.50).

B) (0.50, 0.50).

C) (0.10, 0.20, 0.30, 0.40).

bmaggie

Which of the following sets of numbers does NOT meet the requirements for a set of probabilities?

A) (0.10, 0.20, 0.30, 0.40, 0.50).

B) (0.50, 0.50).

C) (0.10, 0.20, 0.30, 0.40).

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A set of probabilities must sum to one.

bmaggie

Which of the following is an empirical probability?

A) For a stock, based on prior patterns of up and down days, the probability of the stock having a down day tomorrow.

B) The probability the Fed will lower interest rates prior to the end of the year.

C) On a random draw, the probability of choosing a stock of a particular industry from the S& 500 based on the number of firms.

bmaggie

Which of the following is an empirical probability?

A) For a stock, based on prior patterns of up and down days, the probability of the stock having a down day tomorrow.

B) The probability the Fed will lower interest rates prior to the end of the year.

C) On a random draw, the probability of choosing a stock of a particular industry from the S& 500 based on the number of firms.

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There are three types of probabilities: a priori, empirical, and subjective. An empirical probability is calculated by analyzing past data.