In Bayes' theorem, the probability P(E_i|A) is called: MCQ with Answer and Explanation

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In Bayes' theorem, the probability P(E_i|A) is called:

A. Posterior probability

B. Marginal probability

C. Prior probability

D. Likelihood

Answer: Option A

Solution (By JKSSB Mock Tests)

The updated probability after observing the evidence is the posterior probability.

This question belongs to: Accountancy and Statistics Statistics

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Practice More Statistics Questions

Question #1

Conditional probability P(A|B) is defined only when:

A. P(B) > 0

B. P(A) > 0

C. A and B are independent

D. A and B are mutually exclusive

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Correct Answer: Option A

Explanation:
The definition P(A|B) = P(A∩B)/P(B) requires P(B) > 0.

This question belongs to: Accountancy and Statistics Statistics

Question #2

Two independent events A and B have probabilities 0.4 and 0.5. The probability that exactly one of them occurs is:

A. 0.7

B. 0.5

C. 0.2

D. 0.9

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Correct Answer: Option B

Explanation:
P(Exactly one) = P(A) + P(B) - 2*P(A ∩ B) = 0.4 + 0.5 - 2*(0.4*0.5) = 0.9 - 0.4 = 0.5.

This question belongs to: Accountancy and Statistics Statistics

Question #3

The Paasche price index tends to ______ the true increase in prices if consumers substitute away from goods that have become more expensive.

A. Exactly measure

B. Understate

C. Not measure

D. Overstate

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Correct Answer: Option B

Explanation:
Paasche uses current period quantities; substitution away from expensive items reduces their weight, leading to understatement.

This question belongs to: Accountancy and Statistics Statistics

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